Clubbing of clearances and clandestine removal were upheld where common control and bogus invoicing showed one economic enterprise.

Common family control, shared procurement and production, coordinated dispatches, common recovery of sale proceeds, bogus invoices and benami accounts are treated as indicators that separate units function as one economic enterprise, making clubbing of clearances legally sustainable. The text also explains that recovered private records, employee and buyer statements, repeated invoice numbers, bogus transport documents and routing of receipts through fake accounts support findings of clandestine manufacture and removal, with consequent duty, interest and penalty consequences. On these facts, the distinction between the units is described as artificial and the evasion as deliberate.

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Issues: (i) whether the clearances of the two biscuit and confectionery units were liable to be clubbed on the basis of common control and mutuality of interest; (ii) whether the demand of duty with interest and the penalty were sustainable in view of the evidence of clandestine manufacture, removal, bogus invoices and benami bank accounts.

Issue (i): whether the clearances of the two biscuit and confectionery units were liable to be clubbed on the basis of common control and mutuality of interest.

Analysis: The records showed common family control over the units, common handling of procurement, production, dispatch, recovery of sale proceeds and maintenance of private records. The units were found to have operated through the same persons, with goods moved under the same bogus invoices or dispatch slips, payments collected through common channels, and proceeds deposited in benami accounts operated by the same controlling persons. On these facts, the distinction between the units was held to be artificial and the financial and operational interdependence established mutuality of interest.

Conclusion: The clubbing of clearances was upheld, against the assessee.

Issue (ii): whether the demand of duty with interest and the penalty were sustainable in view of the evidence of clandestine manufacture, removal, bogus invoices and benami bank accounts.

Analysis: The adjudicatory record contained recovered kacha registers, private ledgers, statements of employees and buyers, repeated use of the same invoice numbers, transport of goods under bogus invoices, and routing of receipts through fake bank accounts. These materials supported the finding of unaccounted manufacture and removal and justified application of the demand provisions with interest and penal consequences. The Tribunal found no infirmity in the conclusion that the appellant's conduct amounted to deliberate evasion.

Conclusion: The duty demand, interest and penalty were sustained, against the assessee.

Final Conclusion: The appeal failed in full, and the impugned order was affirmed on all material issues.

Ratio Decidendi: Where common control, intermingled accounts, bogus invoicing and shared sale proceeds show that separate units function as one economic enterprise, their clearances may be clubbed and the resulting clandestine removals attract duty and penalty consequences.

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