Clubbing of clearances for SSI exemption upheld where separate registration masked the same legal entity and PAN misuse was found.

Clearances of two units were treated as clubbed for SSI exemption because both registrations belonged to the same legal entity, the second registration was obtained using an incorrect PAN, and the joint venture arrangement was found to be a camouflage rather than a separate entity. The note also states that adjudication was not invalid merely because the show cause notice was issued by an Additional Commissioner and the order was passed by a Joint Commissioner, since both posts function at the same administrative level. On these points, the demand, interest and penalties were sustained.

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Issues: (i) Whether the clearances of the Hyderabad and Pudukkottai units were liable to be clubbed for determining eligibility to small scale industry exemption. (ii) Whether the adjudication order was vitiated because the show cause notice was issued by an Additional Commissioner and the order was passed by a Joint Commissioner.

Issue (i): Whether the clearances of the Hyderabad and Pudukkottai units were liable to be clubbed for determining eligibility to small scale industry exemption.

Analysis: The units were found to belong to the same legal entity, with registration standing in the name of the appellant at both locations. The Tribunal noted that Central Excise registration was PAN-based and that the appellant had used an incorrect PAN to obtain a second registration. The joint venture arrangement did not establish a separate legal entity or a distinct PAN for the Pudukkottai unit, and the record supported the view that the arrangement was only a camouflage. The finding that the existence of the second unit had been suppressed was accepted.

Conclusion: The clearances were correctly clubbed and the denial of SSI exemption was upheld in favour of Revenue.

Issue (ii): Whether the adjudication order was vitiated because the show cause notice was issued by an Additional Commissioner and the order was passed by a Joint Commissioner.

Analysis: The Tribunal held that Additional Commissioner and Joint Commissioner occupy the same level in the departmental hierarchy and that one may succeed the other in office. The mere fact that the notice was issued by one and the order was passed by the other did not create any infirmity in the adjudication.

Conclusion: The adjudication was not vitiated on this ground.

Final Conclusion: The appeal failed on both the jurisdictional objection and the merits, and the impugned order confirming the demand, interest and penalties was sustained.

Ratio Decidendi: Where different registrations are obtained for units of the same legal entity by using an incorrect PAN to disguise the true identity, the clearances may be clubbed for SSI exemption purposes, and a change in designation between Additional Commissioner and Joint Commissioner does not invalidate the adjudication where both function at the same administrative level.

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