Clubbing of clearances and lifting the corporate veil required consistent reasoning, leading to remand for fresh consideration.

Clubbing of clearances and attribution of duty demand required consistent application of the principles on common management, mutuality of interest and lifting the corporate veil. The adjudicating authority's order was found inconsistent because it treated the units as independent while also proceeding on the basis that they were a corporate facade controlled by a principal unit. The Tribunal held that the binding precedent on clubbing and veil lifting had not been properly examined and that the order reflected non-application of mind and inadequate reasons. The impugned order was set aside and the matter was remanded to the Commissioner for de novo consideration, with the appellants to be heard on non-clubbability, limitation and the sustainability of the demand.

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Issues: Whether the clearances of the four units could be clubbed and the duty demand fastened in the manner adopted by the adjudicating authority, and whether the matter required remand for fresh consideration in light of the Supreme Court's ruling on clubbing and lifting the corporate veil.

Analysis: The show cause notice proceeded on the basis that the units were independent while simultaneously alleging that they were only a corporate facade and that their clearances had to be clubbed because of common management, mutuality of interest, and centralised control. The order confirming demand against each unit was found to be inconsistent with the premise that the real assessee was the principal unit allegedly controlling the other concerns. The Tribunal held that the principles governing clubbing of units and attribution of demand after lifting the corporate veil needed to be applied consistently, and that the adjudicating authority had not properly examined the matter in light of the binding precedent relied upon. The Tribunal also found that the order suffered from non-application of mind and was not a properly reasoned order.

Conclusion: The impugned order was set aside and the matter was remanded to the Commissioner for de novo consideration after granting the appellants an opportunity to establish that the units were not clubbable and that the demand was time-barred and otherwise unsustainable.

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