TMI Blog2008 (5) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned JCDR, appeared for the Revenue and Shri K. Parameswaran and Smt. M. Jamuna Rani, the learned Advocates, appeared for the respondents. 3. We heard both sides. Revenue conducted certain investigations into the functioning of a group of nine units. The persons associated with these units belong to one family. Show Cause Notices were issued proposing clubbing of clearances of all the units. Duty to the tune of Rs. 4,27,11,520/- was demanded. Irregular credit availed to the tune of Rs. 13,95,374/- was demanded. Penalties were also imposed totally amounting to Rs. 150 lakhs. The Order-in-Original was No. 9/97 dated 24/28-10-1997. The assessees approached CEGAT. The CEGAT, in its Final Order Nos. 1562 to 1577/2001 dated 9-10-2001, remanded the matter to the Original Authority with the following observations :- "7. We have carefully considered the matter. Without going into the merits and demerits of the case, we are of the view that the matter will have to go back for re-examination, in view of the observations made by the Supreme Court in the case referred to above, since the demand was raised from all the units, It was argued before us that group of persons manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fabrics Distributors , clubbing of the clearances of units with such independent identity is barred. CBEC's Circular dated 29-5-1992 issued under Section 37B also prohibits clubbing of clearances of manufacturing units owned by partnerships not having common partners and clearances of proprietary concern with that of such partnership concerns. 96. CEGAT, while remanding the instant case for de novo adjudication, has directed that the case has to be examined in the light of the guidelines in F. No. 213/15/92-CX-6 dated 29-5-1992, issued by the Board under Section 37B of the Central Excise Act, 1944. The Board's guideline/clarification makes it abundantly clear that a unit with the father and one son of a family as partners is to be treated separately for the exemption limit from another unit with the father and another son as partners. A third unit with both the sons as partners will be yet another manufacturer for the purpose of the exemption. As already found, in the instant case, the owners of the subject nine units are different persons. Consequently, as clarified in the Board's Circular, each is an independent unit. In the light of Board's clarification in F. No. 213/15/92 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Common Management System. All these points are proved, beyond doubt, in this case. (ii) In fact in the case of Ruby Rubber Industries Limited v. CCE, Calcutta-II , issue of clubbing has been dealt with in detail. The Tribunal has discussed various case laws cited by the appellant including Renu Tandon v. UOI - 1993 (66) E,L.T. 375 (Raj.), International Dyestuff Manufacturing Co. v. CCE - 1991 (53) E.L.T. 85 (Tribunal), Swastik Engg. Works v. CCE - 1992 (62) E.L.T. 313 (Tribunal). At para 7.2 of Ruby Rubber Industries Limited case, it has been clearly held that lifting of corporate veil to look into the real identity of the units which might appear on paper to be totally independent, identifiable and individual units, is permissible. As such it is not the identity created on paper, but the actual status of the units, which is to be identified for justifying clubbing of clearances of the various units. Common premises, common head office, common partners and sharing of common facilities may not by themselves, be factors enough to hold that the units involved are not independent units. But it is the cumulative effect of all these, which is to be seen coupled with other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-11-2004. The Respondent prayed to the Tribunal to call for the files from the Reviewing authority to verify whether the signed copy of the Review Order has been filed along with Departmental appeal. It was urged that Review cannot be done beyond a period of one year. (ii) The learned Adjudicating Authority has correctly and properly appreciated the factual and legal position in terms of the tribunal's direction. He has also recorded his categorical findings. (iii) The Adjudicating Authority is required to adjudicate strictly in terms of the Tribunal's order. Taking up of other aspects for de novo adjudication would traverse beyond the scope of remand order. Merely because the issues were kept open, the same did not ipso facto grant any blanket authority or power to the Adjudicating Authority to examine all other factual aspects in detail. Therefore, the findings portion of the Adjudicating Authority to the effect that clearances can be clubbed as discussed in paras 61 to 94 of the impugned Order-in-Original dated 7-11-2003 would deserve to be rejected and ordered to be deleted as totally irrelevant. (iv) Revenue did not choose or opt to file any appeal against the final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m it necessary to modify or amend any of the Show Cause Notices issued including the main Show Cause Notice dated 1-1-93 and the other subsequent periodical show Cause Notices issued thereto. To put it differently, the Show Cause Notices issued recognized the irrefutable factual position that none of the manufacturing units could be considered as dummy units and in fact had accepted separate existence and independent manufacturing facilities for each of the said concerns. Thus, the said position not having been disturbed, the same alone would be sufficient to establish that there cannot be any other basis for considering clubbing of clearances of the said units for any reason whatsoever, in the light of the principles laid down in several judgments rendered in this regard and in particular by taking into account the clear and categorical principles laid down by the Hon'ble Supreme Court in the above referred case of Gajanan Fabrics thereto. (xi) The finding and conclusions arrived at in the impugned order dated 7-11-2003 to the effect that there is regular financial flow back, profit sharing, distribution of income and mutuality of interest throughout the period of demands ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the aforesaid decisions is that in the absence of any finding, of there being common funding and financial flow-back, clubbing of clearances is not permissible, merely on the premise of familial ties between the partners of the units and the other administrative commonalities. In the instant case, as discussed in Paras 61 to 82 supra, it is clearly established on the basis of the profuse data in the allegations vis-a-vis the assessee's books of accounts, that among the group of nine units, there is regular financial flow back, profit sharing, distribution of income and mutuality of interest, throughout the entire period of the demand, thereby warranting clubbing of their clearances as held in the decisions cited above." The above conclusions and the observations of the Adjudicating Authority in Paras 95, 96 and 97 are shockingly inconsistent. Anybody reading the findings till Paragraph 94 would anticipate that the Adjudicating Authority would confirm the proposals in the show cause notice. However, in the subsequent Paras, there is a volte face. No doubt Revenue is justified in filing its appeal against the impugned order. 6.1 The above observations do not mean that we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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