TMI Blog2009 (1) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... as, for the Appellant. Shri R.B. Pardeshi, for the Respondent. [Judgment per : Ranjana Desai, J.]. - Rule : Rule made returnable forthwith. By consent of the parties, taken up for hearing and final disposal. In Central Excise Appeal No. 229 of 2008, M/s. Harnik Nutrients Private Limited is the appellant. In Central Excise Appeal No. 230 of 2008, M/s. Harnik Food Industries is the appellant. In both the appeals, order dated 21-1-1996 passed by the Commissioner-II, Central Excise and Customs, Pune and order dated 11-7-2008 passed by the Customs, Excise and Service Tax Appellate Tribunal (for short, "the CESTAT") [2008 (230) E.L.T. 661 (Tri.-Mumbai)] are under challenge. Since common facts are involved in these two appeals, they can be disposed of by a common judgment and, hence, this common judgment. 2. It is necessary to begin with the facts of the case. On the basis of intelligence, a vehicle loaded with goods was intercepted by Central Excise Officers on 11-10-1993. The vehicle was found loaded with sugar confectionery etc. The gate pass accompanying the vehicle was not sufficient to cover the quantity loaded in the truck. The Officers therefore visited the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing investigation, it was felt that M/s. Harnik Food Industries has floated a dummy unit in the name of M/s. Harnik Nutrients Private Limited with an intention to evade duty and take advantage of small scale exemption; that the two units were one and the same and that they were owned by Hingorani family and their relatives. It was also noticed that the plot on which the two units were situated was owned by M/s. Harnik Food Industries. A part of the said plot was allotted to M/s. Harnik Nutrients Private Limited without charging any rent. Both the units were using common trade mark "HARNIK" which was owned by M/s. Harnik Food Industries for which M/s. Harnik Nutrients Private Limited did not pay any royalty. M/s. Harnik Nutrients Private Limited did not have any machinery of its own to manufacture confectionery. Show cause notice was therefore issued to M/s. Harnik Food Industries, M/s. Harnik Nutrients Private Limited and its partners and directors for alleged contravention of various rules specified thereunder and inter alia, demanding duty of Rs. 4,54,435/- in respect of excisable goods manufactured and cleared in the name of M/s. Harnik Nutrients Private Limited during the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said appeals were disposed of by holding that the clubbing of the clearances of the two appellants is sustainable in the facts and circumstances of the case. The order confiscating land, building and machinery was, however, set aside. 9. The appellants preferred Writ Petition No.1607 of 1997 challenging the judgment and order dated 23-7-1997. By order dated 28-4-2005, a Division Bench of this court remanded the matter to the CESTAT for fresh hearing in the light of circulars and documents relied upon by the appellants and the judgments of the Supreme Court mentioned in the said order. After remand, the CESTAT considered the matter afresh as directed by this court and held that clubbing of the clearances of both the appellants is in order. The CESTAT, however, held that the duty demand confirmed by the Commissioner is payable by M/s. Harnik Food Industries only. The confiscation of the land, building and machinery was set aside. Save for this modification, order dated 24-1-1996 passed by the Commissioner was upheld. The appellants are aggrieved by the above order and, hence, have approached this court. 10. We have heard learned counsel appearing for the appellants. He re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subject period. Learned counsel submitted that in fact the Assistant Collector of Central Excise and Customs of the same Division by letter dated 30-3-1989 held that affixing brand name would not be hit by the mischief of paragraph 7 of the Notification No.175/86 dated 1-3-1986. 11. Learned counsel submitted that the CESTAT has proceeded on the basis that the raw materials were stored together by both the appellants but it failed to consider that payments for raw materials were made separately by the appellants. According to learned counsel, a common management does not establish financial flow back or interlinking and no identity of interest between the two units can be established on this ground in the absence of other evidence. Learned counsel submitted that the appellants are separate units whether considered from their constitution angle or operational angle or from their manufacturing activities angle. 12. Learned counsel further submitted that non-filing of declaration by the directors after M/s. Harnik Nutrients Private Limited revived its unit is not fatal. It is at the most a technical lapse. Similarly, the fact that the gate pass in full could not be prepared a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentation. 15. It appears that in 1989 M/s. Harnik Nutrients Private Limited was closed down on account of Labour problems and their Central Excise Licence was surrendered in June, 1990. That unit was restarted in January, 1991. However, this fact was not brought to the notice of the department by filing application. This is a serious lapse and not a mere technical lapse as suggested by the appellants. Till the vehicles were seized and investigation was done, this fact did not come to light. 16. All the circumstances narrated above clearly establish that M/s. Harnik Food Industries were the real manufacturers and M/s. Harnik Nutrients Private Limited were only a dummy created for the purpose of availing the benefit of SSI Exemption. After remand, the CESTAT has considered the relevant judgments as directed by this court. It would be useful to refer to the observations of the Supreme Court in Supreme Washers (P) Ltd. v. Commissioner of Central Excise, Pune, 2003 (151) E.L.T.14 (S.C.) to which CESTAT has made a reference. While considering the same question, the Supreme Court has expressed that presence of factors like common procurement of raw material, common stock acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
