TMI Blog2002 (4) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... red as M/s. MACL) is engaged in the manufacture of hydrogen gas falling under sub-heading 2804.19 of the CETA. The Company floated three front companies namely M/s. Mahabaleshwar Gas Chemicals Pvt. Ltd., (hereinafter in short referred as MGCPL, Shri Chamundi Gas and Chemicals Pvt. Ltd. (hereinafter in short referred as SCGCPL) and M/s. Nippon Gas and Chemicals Pvt. Ltd. (hereinafter in short referred as NGCPL), (appellant Nos. 2 to 4), in the vicinity of its factory to compress and bottle hydrogen gas which was produced by it as a by-product during manufacture of caustic soda, with the intention of misusing SSI exemption under Notification No. 1/93, dated 28-2-93 and evading payment of excise duty. The premises of all these companies were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies could not be termed as manufacturers of any product chargeable to excise duty for clubbing their clearances with that of company appellant No. 1. Secondly, there is no reliable evidence on record to prove the flow back of money/profit by any of these front companies (appellant Nos. 2 to 4) to the company appellant No. 1. All these companies were independently registered, filing RT-12 returns, holding excise registration. These companies were being assessed by the sales tax and income-tax department, independently and that from the mere lease of cylinders to them by the company appellant No. 1 could not be taken sufficient for holding them to be dummy. The impugned order had been passed only on assumptions and presumptions and deserv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany appellant No. 1, other financial assistance and marketing support was also being given to them by the appellant No. 1, their units were located in the same building and had common staff for maintenance of record etc. while ordering clubbing of clearances of all these companies. But he has lost sight of the material fact that front companies were independently registered, with the central excise department and their RT-12 returns were being approved by the department separately/independently and they were availing benefit of Modvat/Cenvat credit. These companies were also registered as SSI units with Director of Industries, Pollution Control department, they were arranging their own transportation of gas cylinders and even paying inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment with intent to evade duty. All the alleged three front companies (appellant Nos. 2 to 4) got themselves registered with the central excise department. At the time of registration, they disclosed their place of working and work to be carried out by them in their respective units. The ground plans of these units showing their location in the vicinity of the company MACL appellant No. 1 were also submitted by them while getting registration. There is also nothing on the record to prove that plants and machineries installed in these units belonged to the company appellant No. 1. The company appellant No. 1 only supplied cylinders to them and that too on lease basis and had been charging lease money from them. Nothing was concealed by thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner, are not maintainable. The duty confirmed on company appellant No. 1 by clubbing its clearances; with that of other three companies (appellant Nos. 2 to 4) also cannot be legally sustained, in the light of the discussions made above. Neither penalty under Section 11AC could be imposed on this company nor interest could be claimed under Section 11AB as the period involved is from 9-5-95 to 7-7-96, which is much prior, to the time when provisions of these Sections came into force and the same could not be given retrospective effect. 12.In view of the discussions made above, the impugned order of the Commissioner is set aside in toto against all the appellants. The appeals of the appellants are allowed with consequential relief, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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