TMI Blog2003 (10) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... prove that the appellants 1 and 2 are not distinct firms but constitute one firm under the law and that the Commissioner has wrongly raised presumption about the oneness of both these firms on the simple ground that the partners therein are common. Such a presumption according to the learned Counsel, could not be raised for want of any evidence to show the flowback of money from one firm to another or of having common employees, suppliers of raw materials and similarity in the products being manufactured by them. He has further contended that even the show cause notice issued is defective as in a case of clubbing duty could not be demanded from both the firms if one was dummy according to the Department. The duly also could not be confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the partners of the two firms are common having mutual interest therein. But in our view, this fact/circumstance could not be weighed in isolation and made basis for clubbing the clearances of both the firms. The firm appellant No. 1 was started way back in the year 1974, by Shri P.K. Aggarwal as a sole proprietor for the manufacture of railway parts. He got the Central Excise registration, Sales Tax registration, Income Tax registration, etc. in the name of the firm independently, whereas the firm, appellant No. 2, M/s. Manoj Enterprises came into existence only in the year 1981 wherein Manoj Aggarwal and P.K. Aggarwal were the partners. This firm was engaged in the manufacture of tractor parts which were supplied to PTL, Mohali. The Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the firms stood changed. In the firm, appellant No. 1, Smt. Sashi Aggarwal (Widow), Anurag Aggarwal, son of P.K. Aggarwal became partners, while the other two minor sons Tarun Aggarwal and Arjun Aggarwal were admitted to the benefit of the partnership. Similarly, in firm appellant No. 2, due to death of both the partners, Manoj Aggarwal, Son and P.K. Aggarwal, father, the widows of both of them Smt. Sashi Aggarwal and Rachna Aggarwal became partners besides Anurag Aggarwal, Tarun Aggarwal and Arjun Aggarwal being minors were admitted to the benefit of the partnership and the partnership deeds were reduced to writing regarding these firms. They became partners, being natural heirs of the deceased founders of both the firms. Therefore, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Act and Section 3(42) of the General Clauses Act". This very view has been also taken by the Tribunal in G.D. Industrial Engineers (supra) wherein also the question of clubbing of the clearances of the 3 firms in which the partners were common arose. The Tribunal took the view that the partnership firm is distinct from its partners. The goods cleared by 3 firms could not be clubbed. The relevant observations made by the Tribunal in that case are reproduced below : "A partner in any of the three firms is distinct from each of the three firms and vice versa. Each of the three firms is separate and distinct from the other two and also distinct from the individual partners composing them, although they are identical. Once this is so, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed from both the firms on the ground that they have got common partners who have got mutuality of interest therein. Even the learned Commissioner while adjudicating the show cause notice has failed to record specific finding regarding the dummy character of any of these two firms. He has likewise confirmed the duty against both of them and had made them liable to pay individually or severally. Therefore, not only the show cause notice issued but also the impugned order are bad in law. It is well settled in a case of clubbing of clearances of two units, it has to be alleged and proved by the Department that which one was only a dummy and non-existent unit and which was the principal/main unit. The duty liability can be fastened, in such a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
