Clubbing of clearances upheld where two units functioned as one concern to route supplies and evade duty.

Clearances of two ostensibly separate units may be clubbed where surrounding facts show common control, overlapping family management, shared office facilities, common communication channels, shared staff, and movement of raw materials and correspondence indicating one concern was routed through the other to avoid duty. On those facts, the duty demand and penalties were sustained. Limitation was rejected because the extended period turns on the statutory relevant date, not the date of departmental knowledge. A reduction in demand was also refused because alleged Cenvat credit and export-related abatements were not supported by evidence, leaving the quantification challenge unsubstantiated.

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Issues: (i) Whether the clearances of the two concerns were rightly clubbed and the duty demand with consequential penalties sustained. (ii) Whether the demand was barred by limitation or liable to reduction on the ground of incorrect quantification.

Issue (i): Whether the clearances of the two concerns were rightly clubbed and the duty demand with consequential penalties sustained.

Analysis: The units were found to be under common control, with overlapping management by family members, common office facilities, common telephone and fax, shared staff, receipt of raw material in one unit though procured in the name of the other, and correspondence showing one concern offering supplies through the other to avoid duty. The absence of independent manufacturing infrastructure in the SSI unit, coupled with unauthorized signing of each other's letters, supported the conclusion that the two entities were functioning as one unit behind the corporate form.

Conclusion: The clearances were rightly clubbed and the duty demand and penalties were sustainable against the assessee.

Issue (ii): Whether the demand was barred by limitation or liable to reduction on the ground of incorrect quantification.

Analysis: The plea of limitation based on departmental visit was rejected because the relevant date for the extended period was the statutory relevant date under the Act, not the date of knowledge of officers. The plea for reduction in demand on the basis of alleged Cenvat credit and export abatements also failed because the supporting documents were not furnished and the claim was not substantiated.

Conclusion: The demand was not time-barred and no reduction in quantification was allowed.

Final Conclusion: The appeals failed in entirety, and the adjudication confirming clubbing, duty demand, interest, and penalties was upheld.

Ratio Decidendi: Where surrounding circumstances show that two ostensibly separate units are in substance run as one concern to route clearances through an SSI entity and evade duty, their clearances may be clubbed and the extended limitation under the central excise law can be invoked.

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