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of <h1>Tribunal overturns order, finds no proof of firms acting on behalf of one another.</h1> <h3>JAGJIVANDAS & CO., THANE Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY-II</h3> The Tribunal set aside the impugned order and allowed the appeal, concluding that the Department failed to prove that the clearances of the three firms ... - Issues Involved:1. Clubbing of clearances for determining eligibility for exemption u/s Notification No. 176/77-C.E.2. Validity of the demand for Central Excise duty and imposition of penalty.3. Non-joinder of M/s. Babu Lal Bhoti Lal & Co. and M/s. Hind Industries in the appeal.Summary:1. Clubbing of Clearances:The primary issue was whether the clearances of M/s. Babu Lal Bhoti Lal & Co. and M/s. Hind Industries should be clubbed with those of M/s. Jagjivan Dass & Co. for determining eligibility for exemption u/s Notification No. 176/77-C.E. The Collector of Central Excise held that the goods manufactured by the two firms were actually on behalf of M/s. Jagjivan Dass & Co., thus exceeding the stipulated limit under the notification. The Tribunal, however, found that the nine pieces of evidence relied upon by the Collector were either not proved or innocuous. The Tribunal emphasized that the firms were registered long before the relevant tariff item and notification came into force, had separate registrations, and were independent entities in the eyes of the law. Consequently, the Tribunal concluded that the clearances should not be clubbed.2. Validity of Demand and Penalty:The Collector had demanded Central Excise duty amounting to Rs. 3,15,728.27 and imposed a penalty of Rs. 10,000/- on the appellants. The Tribunal found that the demand should have been restricted to a period of 6 months preceding the date of the show cause notice, which would significantly reduce the duty liability. The Tribunal also noted that the firms had separate registrations and were operationally independent, thus invalidating the basis for the demand and penalty.3. Non-joinder of M/s. Babu Lal Bhoti Lal & Co. and M/s. Hind Industries:An objection was raised regarding the non-joinder of M/s. Babu Lal Bhoti Lal & Co. and M/s. Hind Industries in the appeal. The Tribunal dismissed this objection, noting that the order was joint and several, and the appeal memo included references to these parties. The Tribunal held that the non-joinder was of academic importance and did not affect the merits of the case.Conclusion:The Tribunal set aside the impugned order and allowed the appeal, concluding that the Department failed to prove that the clearances of the three firms were on behalf of one another, thus invalidating the demand for duty and the imposition of penalty.
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