TMI Blog2020 (2) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant. The amount of ₹ 25 Lakhs as was debited from the appellant s account due to en-cashing of one of the three cheques issued by the appellant has therefore, to be refunded back to the appellant. Appeal allowed - decided in favor of appellant. - Excise Appeal No.50498 of 2019, 50536 of 2019 - Final Order No. 50016-50017/2020 - Dated:- 8-1-2020 - HON BLE MR. BIJAY KUMAR, MEMBER (TECHNICAL) AND HON BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Mr. Arun Goyal, Advocate for the Appellant Mr. O.P. Bisht, Authorised Representative for the Respondent ORDER RACHNA GUPTA: Present order disposes of two different appeals, issue involved being common to both the appeals, the details are as follows:- Appeal No. Show Cause Notice No. 7 date Amount of Refund O-I-O No. date O-I-A No. date 50498 1 SCN for rejection of refund dated 24.01.2017 ₹ 25.00 Lacs 1. 35/17-18 dated 21.06.2017 460-464 dated 01.11.2018 2 (a) SCN issued for seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of sale of various products without issuance of invoices. On the basis of stock of raw-material, goods under work in process and finished goods, the Department formed an opinion that the appellant is indulged in clandestine manufacture of excisable goods without obtaining Central Excise Registration and clearance of such goods is without issuance of invoices and without payment of Central Excise Duty. Accordingly, a show cause notice No.2026 dated 09.03.2017 was served upon the appellant proposing confiscation of the seized goods having aggregate value of ₹ 1,50,19,496/- with the proposal of penalty upon Shri.Harphool Singh Jhuria, authorised signatory for M/s.Sona Plastics and Shri Suman Jhuria, the Proprietor thereof. Simultaneously, a show cause notice bearing No.219 dated 08.05.2017 was served upon the appellant proposing the demand of Central Excise Duty amounting to ₹ 1,05,71,605/-alongwith the interest at the appropriate rate and the proportionate penalty. The said proposal was confirmed vide Order-in-Original as mentioned above. The appeals thereof have been rejected vide the Order under challenge. 4. I have heard Mr. Arun Goyal, ld. Advocate for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c tanks with the lids. Rest of the plastic goods i.e. buckets, mugs, pattas etc. were manufactured by the appellant. Machineries for both the kind of manufacture are absolutely different which had been purchased at different point of times. The moulds used for manufacture of final products by both the manufacturing units were also altogether different. Hence, irrespective of whatever commonness observed by the Department clubbing of the clearances of two manufacturing units is absolutely wrong on the part of the Department. 7. With respect to the SCN dated 24.01.2017 qua the rejection of refund, it is submitted that with respect to the proposed demands three Cheques were issued by the appellant with the request to not to en-cash the same till the adjudication. However, one of the Checks amounting to ₹ 25.00 Lakhs was got en-cashed. Above all, it is submitted that no SCN has been issued to M/s.Siddharth Plastoware. In absence whereof question of clubbing their clearances to that of M/s. Sona Plastic Udyog i.e. the appellant does not at all arise. The rejection thereof in view of the aforesaid request has been impressed upon as wrong. Resultantly, the order under challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harth Plastoware but as the authorised signatory for the appellant i.e. M/s. Sona Plastics Udyog. Hon ble High Court of Kolkata in the case of Commissioner of Central Excise, Kolkata vs. Diamond Scaffolding Co. Reported as 2011 (274) ELT 10 (Cal.) has held that clubbing of clearances is not sustainable in case no SCN has been issued to the unit whose clearance has been clubbed with the clearance of the assessee. This Tribunal also, the Chennai Bench, in the case of M/s. Thiraviam Engg. Works vs. CCE, Tirunelveli reported as 2018-TIOL-1930 CESTAT-MAD has held that when no SCN has been issued to alleged dummy unit same would vitiate the proceeding. The demand cannot sustain for want of SCN to be issued by the Department to the alleged unit whose clearance is proposed to be clubbed with that of the assessee. These adjudications are sufficient for us to hold that the very basis of the demand i.e. the issuance of SCN to the alleged dummy unit as far as the amount of clearances of M/s.Siddharth Plastoware is concerned is missing in the present case. 11. Coming to the merits of the case, it is foremost necessary to establish as to whether M/s.Siddharth Plastoware is actually a dum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the certificates which are nowhere been denied by the Department clarifies crystally that M/s.Siddharth Plastoware cannot be called as the dummy unit of the appellant as it is existing much prior than the existence of the appellant. Both are manufacturing and clearing altogether different plastic products. The raw-material used for the purpose by both of them is absolutely different. To further elaborate this observation we draw our support from the following case law:- (i) Pratap Press vs. Delhi Press Workers Union reported as AIR 1960 (SC) 1231 wherein it was held that two units cannot be considered as forming one industrial unit merely because it is owned by same person. Shri Harphool Singh Jhuria being the common authorised signatory, therefore, cannot be a ground to club the clearances of the factories herein. (ii) Spring Fresh Drinks vs. Collector of Central Excise reported as 1991 (54) ELT 333 wherein it has been held that close relationships between the Directors of two units belonging to two limited companies and situated in adjacent plot is not sufficient for clubbing their clearances. The fact that the Proprietor of M/s.Siddharth Plastoware is the husband ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment despite conducting the physical search of the premises had failed to take note of the same. There is no evidence produced on record to the contrary. There remains no question in the allegation as far as electricity connection is concerned. We also draw our support from the decision of this Tribunal Hyderabad Bench Commissioner of Central Excise, Vishakhapatnam-I vs. M/s. Vizag Poly Packaging Industries reported in 2016- TIOL-2614-CESTAT-Hyd. wherein the case of Renu Tandon vs. Union of India reported in 1993 (66) ELT 375 (Raj.) has been relied upon and it was held that where two units situate at same premises, manufactures similar products and have some common management office labour or even common electricity connection owned by the relatives, but in absence of the evidence of common funding and financial flaw back the said two units cannot be treated as one and thus their clearances cannot be clubbed. Notification No. 175/86 CE dated 01.03.1986 was relied upon. 15. In view of the entire above discussion, we hold that the Department has failed to discharge its burden for proving the financial dependence of M/s.Siddharth Plastoware upon the appellant. They have also fai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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