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2019 (8) TMI 483

..... bed with the clearance of the Appellant M/s Prints Electronics Equipments Pvt. Ltd. HELD THAT:- We find substance in the argument of the Appellant inasmuch as the entire case has been built up by the Revenue mainly on the ground that since M/s JRSE alleged to have no adequate manufacturing facility on the date of visit of the officers to the premises at Bangalore, one of the employee of M/s PEEPL stationed at Bangalore and statements of employees/Director that all the goods must have been manufactured at the premises of M/s PEEPL at Malad, Mumbai and cleared without payment of duty, under the invoice of M/s JRSE. There is no evidence to the effect that M/s PEEPL Ltd had procured raw material assembled at their premises at Malad and cleared/sold in the market without payment of duty. No evidence has been brought on record of those buyers who purchased the said goods and to whom the manufactured goods were sold and mode of delivery of alleged goods clandestinely from the manufacturing premises at Malad to the buyer’s premises - In absence of substantial evidences of manufacturing and clearances of the goods, it cannot be assumed that since, the facility of manufacture at the pr .....

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..... e Malad factory, machines were either directly supplied to the customers or dispatched to the administrative office, from where these were further supplied to the clients. The hardware installation report prepared in duplicate is also maintained at administrative office. 3. In the same industrial estate where the administrative office of the Appellant M/s PEEPL is situated, there existed the office of another entity M/s J.R.S. Electronics (in short M/s JRSE) on the 3rd floor of the same building. The factory of M/s JRSE is situated at Bangalore and is a Private Limited Company, registered under Companies Act. M/s JRSE is a small scale enterprise and engaged in the manufacture of vehicle tracking system, electronic attendance recorder, etc. The goods manufactured by the Appellant M/s PEEPL Pvt. Ltd. are also manufactured by M/s JRSE. However, the items like electronic attendance recorder etc. manufactured by M/s JRSE were totally different in quality from those manufactured by the Appellant M/s PEEPL. 4. M/s JRSE had availed SSI exemption and not paid the duty during the relevant period. The director of M/s M/s JRSE viz. Mr.Jayesh Shah, Mr.Ramanuja Varadachari and Mr. Shashikant Bha .....

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..... s Electronics Equipments Pvt. Ltd and M/s JRSE. Thus, it is alleged that they have mutual interest in the business of each other and all the finished goods were manufactured only at Malad factory of M/s PEEPL and the manufactured goods were sold in the name of M/s JRSE. 8. It is also the allegation of the Department that the price charged by the Appellant for upgraded machine in exchange of old machine has been under-valued as money value of additional consideration in the form of old machine were not considered. Further, the Appellant M/s PEEPL could not provide the corresponding invoices in respect of certain hardware installation report issued for repair and reconditioning of the goods which were found at office at Vadala. 9. The learned Advocate, assailing the impugned order, has submitted that nowhere the Department has alleged that M/s JRSE is a dummy unit of the Appellant company M/s PEEPL. Hence, clubbing of the clearance value of M/s JRSE to that of the Appellant is unsustainable. Further, they have submitted that even if it is assumed that the goods were cleared under the invoices of M/s JRSE were not manufactured at their Bangalore factory, then also the situs for levy a .....

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..... ufacture the goods. It is alleged that the goods were manufactured by M/s PEEPL Pvt. Ltd and cleared in the name of M/s JRSE. In arriving at the said conclusion, it is assumed that the premises where M/s JRSE was operating being a flat and there was no manufacturing equipment and no employees were available at the time of Mazhar drawn by the Officers. It was alleged that their sales invoices were used by M/s PEEPL for clearance of their manufactured product. The learned Advocate, assailing the impugned order, has argued that M/s JRSE had been the real manufacturer of the goods in their factory even though the premises was a flat and the findings of the learned Commissioner were not in consonance with Mazhar. It is his contention that the process of assembly of the raw material was going on in the said premises at the time of visit of the officers which is evident from the fact that there were around 10 pieces of finished goods lying in the said premises. In support of his contention that the goods were manufactured at Bangalore the learned Advocate has placed certificate from the Karnataka Director of Industries & Commerce allowing manufacturing in the said premises, Product ca .....

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..... ance of all the manufactured goods in their gross turnover, and part of the clearances were effected on the invoices of M/s JRSE. The argument of M/s PEEPL and M/s JRSE are that both these companies are independent in existence and separately manufactured and sold goods even though exchanged/shared some administrative convenience on purely commercial basis since their head offices were situated in the same premises. Thus, the goods cleared under the invoice of M/s JRSE cannot be added to the value of the clearances of M/s PEEPL. We find that in confirming the demand, the Revenue has mainly relied upon the statements of various persons and the manufacturing facility available at the unit of M/s JRSE at Bangalore. 16. It has been recorded by the authorities below that on the date of visit of the premises of M/s JRSE, the visiting officers could not find any substantial machinery nor work force in the said premises where the manufacturing activity of M/s JRSE claimed to have been carried out. In answering the allegation, the Appellant has submitted that during the said period in question, some semi-finished goods were found in the said premises as per the pending orders; they are duly .....

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