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of <h1>Central Excise demands against Meera Industries and partners set aside by Tribunal</h1> <h3>KR. BALACHANDRAN Versus COMMISSIONER OF C. EX., COIMBATORE</h3> KR. BALACHANDRAN Versus COMMISSIONER OF C. EX., COIMBATORE - 2003 (151) E.L.T. 68 (Tri. - Chennai) Issues Involved:1. Confiscation of goods and imposition of penalties.2. Clubbing of clearances of Meera Industries and Rama Industries.3. Eligibility for SSI exemption.4. Validity of show cause notices and time-barred demands.Summary:1. Confiscation of Goods and Imposition of Penalties:The Commissioner of Central Excise, Chennai confirmed the demands raised in the show cause notice against Meera Industries for the years 1995-96 to 2000-2001 u/s 11A(2) of the CE Act. Penalties were imposed u/s 11AC of the CE Act and Rule 173Q for offences committed by Meera Industries. A personal penalty of Rs. 2.00 lakhs was imposed on Shri K.R. Balachandran, Partner of both Meera Industries and Rama Industries under Rule 209A of CE Rules. The seized goods were confiscated under Rules 173Q and released on payment of redemption fine of Rs. 4.4 lakhs. Plant and machinery were also directed to be confiscated under Rule 173Q and 209 of CE Rules, with an option to redeem on payment of a fine of Rs. 1 lakh.2. Clubbing of Clearances of Meera Industries and Rama Industries:The Commissioner concluded that there were no two separate manufacturing activities, and all manufacturing activities were done by Meera Industries. He noted financial flow back and cross-funding between the two firms, proving mutuality of interest. The Commissioner held that the Department did not take the case of clubbing of two separate units' clearances but proved financial flow back, making Meera Industries ineligible for SSI exemption.3. Eligibility for SSI Exemption:The Commissioner held that Meera Industries manufactured excisable goods bearing the brand name of another firm, making them ineligible for SSI exemption. The Commissioner distinguished several judgments cited by the appellant, rejecting the plea that each firm was different and there was no use of the brand name of the other.4. Validity of Show Cause Notices and Time-Barred Demands:The appellant argued that the Department failed to issue a show cause notice to Rama Industries, making the proceedings invalid. The Tribunal agreed, stating that the violation of issuing a show cause notice to Rama Industries vitiated the proceedings. The Tribunal also noted that the Department was aware of the existence of Rama Industries, making the demands time-barred. The Tribunal set aside the impugned order on these grounds and allowed the appeals.
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