TMI Blog2008 (4) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... st Order-in-Original No. 25/RH/Adj./2005-06 dated 12-9-05 passed by the Commissioner of Central Excise, Delhi-IV. By this order, the Commissioner ordered - (a) clubbing of clearances of BCI and SFP for the purpose of determining the aggregate value of clearances in terms of SSI exemption Notification No. 8/99-C.E. dated 28-2-99, Notification No. 8/2000-C.E. dated 1-3-2000, Notification No. 8/2001-C.E. dated1-3-2001, Notification No. 8/2002-C.E. dated 1-3-2002 and Notification No. /2003/- dated 1-3-2003; (b) confirmed the demand of duty amounting to Rs. 49,39,323 against BCI under proviso to Section 11A(1) of Central Excise Act, 1944 alongwith interest on this duty at the applicable rate as per the provision of Section 11AB; (c) imposed penalty of Rs. 49,39,323/- on BCI under Section 11AC; (d) imposed penalty of Rs. 15 lakhs on BCI under Rule 25(1) of Central Excise Rules, 2001/2002 read with erstwhile Rule 173Q(1) of Central Excise Rules,1944 and (e) imposed penalty of Rs. 2 lakhs on Shri S.K. Gandhi, and penalty of Rs. 5 lakh on Shri A.K. Gandhi under Rule 26 of Central Excise Rules, 2001/2002 read with erstwhile Rule 209A of Central Excise Rules, 1944. 2. SFP is a partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Ms. Pushpa Gandhi are inactive Directors, Both the units had common telephone connection and fax installed in the premises of BCI and accounts of both the units were being maintained by the same Accountant Shri A.K. Gulati. (3) On scrutiny of a file recovered from the premises of BCI, it was found that on a number of occasions, the raw material for the manufacture of finished goods, procured in the name of SFP, had, actually, been received in the factory premises of BCI and in fact the raw-material for both the units was being received under the same Salex Tax No. FBD/HGST/120298 dated 26-3-85 which belongs to SFP. (4) From a file recovered from BCI, some letters issued from BCI to their customers - M/s. Maturi Udyog Ltd. and JCT Ltd. were found wherein BCI had offered to supply the corrugated boxes through their 'associate concern SFP'. (5) Though on paper BCI with Shri A.K. Gandhi, Ms. Pushpa Gandhi and Ms. Reena Gandhi as Directors and SFP with Shri S.K. Gandhi as proprietor, claim to be independent units, it was found that on numerous occasions, Shri S.K. Gandhi had signed BCI letters to the customers of BCI and similarly Shri A.K. Gandhi has signed the letters of SPF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) The Commissioner's conclusion that SFP and BCI constitute one unit is totally wrong. The factors like raw-material purchased from the same supplier, adjacent location of the two units, common staff, common telephone No. and fax No., common electricity connection and S.K. Gandhi of SFP signing the BCI's letters and Shri A.K. Gandhi of BCI signing of SFP's letters or BCI and SFP sharing the same common office are not relevant at all for determining the question as to whether BCI and SFP are two independent units or the two are one and the same. (6) In this case, there is no suppression, as BCI were filing R.T.12/GR-1 returns during the period of dispute, and SFP, availing SSI exemption, was filing annual declaration regarding value of clearances. Therefore, major period of SCN from Aug. '99 to July '03 is time barred. In any case, since the officers visited the unit of BCI and SFP was on 27-3-03 and the SCN had been issued on 1-9-04, the Department had knowledge about the alleged relationship between BCI and SFP since 27-3-03 and therefore, the demand for the period from 27-3-03 to 31-7-03 is time barred. In this regard, reliance is placed of the Larger Bench of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procurement is not only procured from the same source and under a common sales tax registration number in the name of SFP. but it has also been found that on numerous occasions, the raw material procured in the name of SFP was actually received in the premises of BCI. (6) On several occasions, BCI has written to his customers offering to supply corrugated boxes through SFP. BCI vide letter dated 24-9-01 had intimated to Maruti Udyog Ltd. that they have a stock of 5335 boxes which can be supplied through their associate concern SFP in which case they would not be charge with excise duty. Similarly, BCI vide their letter dated 14-3-2000, intimated M/s. JCT that since 16% excise duty has been imposed on corrugated boxes, they can supply the corrugated boxes through their sister concern SFP, which is an exempted SSI unit and M/s. JCT was requested to issue a purchase order in the name of SFP. This letter to JCT had been signed by Shri S.K. Gandhi on behalf of BCI though on paper Shri S.K. Gandhi was supposed to have nothing to do with BCI. 5.1 The explanation given for Shri S.K. Gandhi of SFP signing without any authorisation from BCI, the letters on behalf of BCI (reminding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(vii) of exemption Notification No. 8/99-CE and corresponding clauses of successor notifications just because these clauses have been invoked, the demand of duty does not get vitiated. 6. It has been pleaded that some the officers had visited the units on 27-3-03 and the SCN had been issued on 1-9-04, for demand of duty for short paid duty for the period from 1-8-99 to 31-3-04, the duty demand for the period from 27-3-03 to 31-7-2003 is time barred and in this regard, the reliance has been placed on the Tribunal judgment in the case of Nizam Sugar Factory v. CCE reported in 1999 (114) E.L.T. 429. However, this judgment does not help the appellant as in this case, it has been held that the date of knowledge of the departmental officers in respect of clandestine removal of goods/suppression of facts is not relevant: for the purpose of computing the period of five years and the date for this purpose is the "relevant date" as defined in Section 11A(3). 7. It has been pleaded that in any case the quantification of duty demand is incorrect and would get reduced to Rs. 27,95,873/- as (a) in the event of clubbing the clearances of SFP with the clearances of BCI, the BCI would be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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