2003 (8) TMI 248 - AT - Central Excise

Tribunal Upholds Entity Status for M/s. DPK & M/s. Glolite under Notification 175/86

DPK ENGINEERS PVT. LTD. Versus COMMISSIONER OF C. EX., BANGALORE

The Tribunal upheld the separate entity status of M/s. DPK and M/s. Glolite, allowing them to claim benefits individually under Notification 175/86. ... Appeal to Appellate Tribunal - Grounds - Appeal - Order-in-original - SSI Exemption - Clubbing of clearances - Seizure - Mahazar witness Issues Involved:1. Clubbing of clearances of M/s. DPK and M/s. Glolite for determining benefits under Notification 175/86.2. Disallowance of Modvat credit claimed by M/s. Glolite.3. Confiscation of DG Sets and imposition of penalties on M/s. DPK and M/s. Glolite.4. Validity of the remand order by CEGAT for de novo adjudication.5. Evaluation of corroborative evidence and statements during de novo adjudication.6. Eligibility of M/s. Glolite as an independent manufacturer.Detailed Analysis:1. Clubbing of Clearances:The Revenue argued that M/s. DPK and M/s. Glolite should have their clearances clubbed to determine eligibility under Notification 175/86. The initial adjudication by the Collector confirmed this, but the Commissioner in the de novo adjudication found no corroborative evidence to support clubbing. The Tribunal upheld the Commissioner's finding, noting that the adjudicator had properly evaluated the material and concluded that the two firms were distinct entities entitled to separate benefits under Notification 175/86.2. Disallowance of Modvat Credit:The show cause notice proposed disallowing Modvat credit amounting to Rs. 17,16,577.37 availed by M/s. Glolite. The Commissioner in the de novo adjudication allowed the Modvat credit, which the Tribunal upheld, finding no valid grounds in the Revenue's appeal to challenge this conclusion.3. Confiscation and Penalties:The initial order included the confiscation of 8 DG Sets and penalties on M/s. DPK and M/s. Glolite. The Commissioner's de novo adjudication dropped the demands of duty and allowed Modvat credit but ordered confiscation of 3 DG Sets with a redemption fine. The Tribunal found no reason to disturb this finding, noting that the Commissioner had considered the totality of the evidence.4. Remand Order Validity:The Revenue questioned the remand order by CEGAT, arguing it was incorrect to remand the case when the witness avoided appearing. The Tribunal dismissed this ground, stating the remand order had attained finality and could not be altered. The Commissioner had complied with the remand order by conducting a cross-examination of Smt. Narmada Kumari and considering the consequences.5. Evaluation of Evidence:The Revenue contended that the Commissioner had not evaluated corroborative evidence such as unauthorized shifting of premises, lack of manufacturing facilities, and managerial control by M/s. DPK. The Tribunal found that the Commissioner had indeed evaluated these aspects in detail, noting that the units had separate registrations and there was no financial interdependence proving clubbing was necessary. The Tribunal rejected the Revenue's grounds, stating they were vague and unsupported by specific evidence.6. Eligibility of M/s. Glolite as Independent Manufacturer:The Tribunal noted that the Commissioner had recognized M/s. Glolite as an independent manufacturer, and this finding was not disputed by the Board. The Tribunal found no merit in the Commissioner (Appeals) remand order, which had set aside the Assistant Commissioner's order and remanded the case for a fresh decision. The Tribunal upheld the Commissioner's finding that M/s. Glolite was an independent manufacturer entitled to Modvat credit and dismissed the Revenue's appeal.Conclusion:The Tribunal dismissed the Revenue's appeal (No. E/1143/96) on the grounds that no valid points were made for decision. It also allowed the appeal by M/s. DPK Engineers (No. 1350/99), setting aside the Commissioner (Appeals) remand order and affirming the independent status of M/s. Glolite as a manufacturer. Both appeals were disposed of accordingly.