TMI Blog2005 (7) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was proposed in the Show Cause Notice at Rs. 35,806/- Rs. 2,884/- cannot be upheld. The finding that the three units are just dummy units cannot be upheld when the department is recognizing separate clearances and duty demands on these other units. The matter of existence of these units and the activity were within the knowledge of the department vide proceedings initiated by Preventive Officers by Show Cause Notice dated 8-3-1994 issued to each unit and which culminated in order-in-appeal by Commissioner dated 3-7-1996. Since the ld. Commissioner has found that SS coil were removed for slitting and not have been found to be diverted for any other purpose, the non-following of procedure of Modvat rules will not call for the heavy penalty of Rs. 1.00 lakh under Rule 173Q on Sotex. The same is required to be set aside. Since no duty demands and/or confiscation liability under Rule 173Q(1) are being upheld, the confiscation ordered on M/s. Sotex under Rule 173Q(2) is not upheld. The same is set aside. Since duty demands on M/s. Sotex are not being upheld, the penalty of Rs. 1,45,29,754/- u/s 11AC as imposed is to be set aside. The duty demand of Rs. 18,900/- on 8,400 kgs of scrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as well as non-branded SS watch straps. SSI exemption under relevant notification was available only to unbranded straps and 85% of the production is that of branded straps which had been cleared on payment of duty by respective units. These units admittedly have full range of machinery for manufacture of watch straps as is evident from the notice as well as in the Order-in-Original. 4. Appellants produced audited accounts which are subject to statutory audit and income-tax and other supporting documents to show that : (a) Units are geographically apart, having their funding and financial arrangement; (b) They hold separate Central Excise registration, SSI registration and are assessed to Income-tax, Sales tax and Central Excise separately; (c) They are purchasing raw material independently and are also selling their goods to various purchasers independently; (d) They are maintaining books of accounts separately for purchase and sale of finished goods; (e) They are obtaining separate loans and credits from various banks; (f) They have filed separate classification lists, price lists, RT 12 returns which have been regularly assessed by the department; (g) They are periodically vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omponents to other units for further processing, finishing etc. and such finished parts were against sent back to Sotex by other units depending on the idle capacity. It was pointed out that balance sheets showed that job work charges have been regularly paid by Sotex for this process. Various documents of common purchase of raw materials and reliance of no clubbing in this case were also produced. (e) On the issue of alleged clandestine removal, it was submitted that gate passes themselves show all processes being carried out and products were removed on such documents and they were only parts of watch strap not complete watch straps in any case and there was no evidence lead in the Show Cause Notice or otherwise by any statement brought on record that the said gate passes represent complete watch strap manufactured and thereafter cleared shown as parts. (f) It was also submitted that while working out total production figure in order to ascertain SSI limits, the department has sought to rely upon the statements of supervisors of three units and on making undisclosed calculations worked out the production as per production capacity and the figures have been taken together to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round that the demand on watch strap and remanded for consideration of issue of clubbing only to the extent of the demand raised on M/s. Sotex. All other three appeals were allowed. (b) A clarificatory order was passed on 22-5-2003 which clarified that instead of three appeals being allowed, four appeals allowed being that of appeal of the appellant Shri V.V. Rajani was also allowed. Consequent to the order on remand, Commissioner passed order dated 14-3-2003 reconsidering all issues afresh and confirmed the same demands in the same manner as in the earlier order holding that all the three firms except M/s. Sotex are dummy units and that there is absolutely no finding arrived on financial flow back in light of the fact that Commissioner was satisfied with the explanation of the appellants. There is also no finding on the issue of clandestine removal. He confirmed the demand. Hence the present appeals. 9.After hearing both sides and considering the issues, it is found - (a) It is an admitted position that the show cause notice has a reference to all the four units required to be termed as one unit and their values of clearances were required to be clubbed together and eligibility to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Para 8 is : 8... Moreover the statement of Shri Subhash Karia recorded at that time in connection with the case booked against Sonic which was adjudicated by the then Assistant Commissioner of Central Excise Customs, Bharuch vide Order-in-Original dated 24-10-1994 confirms my findings in this order that it is only the Sotex owned by Shri Mahendra M. Majithia, which is the unit and all other units i.e. Sonic, Stelex and Unity are just dummy units fully under the control of Shri Mahendra M. Majithia and transactions between them are not at all on principal to principal basis. Which would lead to the only conclusion that the department was fully aware of the charges as found by the ld. Commissioner. There is nothing new in the findings, enquiries and the proceedings now initiated that was not before the departmental officers in 1993-94 when the first case was detected notice was issued. However, no notice to propose clubbing was issued at that time. If nothing new is coming forth in 1998, to issue the present notice, demanding duties on issues well known in 1993, then the demand is to be held to be barred by limitation. The bar of limitation by alleging suppression should be held to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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