TMI Blog1976 (10) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... one lakh cleared on or before the 1st day of April in any financial year by on bahalf of a manufacturer from one or more factories for some consumption would be exempted from excise duty, provided that the exemption would not be applicable to a manufacturer whose value of steel furniture cleared in the previous financial year had exceeded rupees two lakhs. Petitioner claimed exemption and approached the Assistant Collector of Central Excise at Cuttak for an appropriate order. The said authority heard the petitioner and by order dated 27-8-1974, refused to entertain the claim of exemption holding that the petitioner and a partnership firm by the trade name `Metalex Industries' were in fact the business of one and the same Hindu Undivided fam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to provide to small scale manufacturers some concessions by way of exemption from duty of excise so that they would be in a position to market their products in competition with the large scale manufacturers. It does not appear that this concession should be admitted to manufacturers of large scale establishments having more than one unit with the intention of availing the concession separately for each unit. The language of the notification is also very clear to emphasis the fact that the exemption is applicable to a manufacturer and not to individual factories even if they are functioning in different names. In the present case both Metalex Industries and Weldcraft (Orissa) Private Ltd. are owned by the members of the family of Sri J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tively does not amount to more than a right to participate in the profits of the company. The company is a juristic person and is distinct from the shareholders. It is the company which owns the property and not the share holders............" 7. There are circumstances when the Court is entitled to lift the veil of incorporation and take stock of the actual situation. Palmer in his treatise on Company Law (21st Edn.) at page 133 gives a list of instances where the veil of incorporation is lifted. They are :- (i) When companies are in the relationship of holding and subsidiary (or Sub-subsidiary) companies; (ii) Where a shareholder has lost the privilage of limited liability and has become directly liable to certain creditors of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tituted a firm and went into production at Cuttack. Subsequently, the three partners together with a member of their family and three outsiders formed and incorporated a company which started production at Bhubaneswar. There is absolutely no basis for the finding that these two manufacturers the firm and the Company are two units of the Hindu Undivided Family. There is no indication that the three strangers who are shareholders in the Company are name lenders or the share money came from the family of the partners and the dividend, if any, goes to them. In the circumstances, the finding of the Assistant Collector is clearly erroneous. In fact, there is no material which would justify the conclusion. 9. We accordingly allow the writ applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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