Clubbing of partnership units for excise failed where common facilities did not prove one unit was a dummy concern.

Two separate partnership units could not be clubbed for central excise purposes merely because they had common partners, shared storage and occupied the same . The department had to prove that their manufacturing activity, business dealings, management or clearances operated in tandem, or that one unit was a dummy of the other; mere suspicion from common facilities was insufficient. On the evidence, the units remained distinct concerns and were entitled to the benefit of Notifications 130/82 and 253/82. The demand and penalty were set aside with consequential relief.

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Issues: Whether the two partnership units could be treated as one unit for central excise purposes so as to deny the benefit of Notifications 130/82 and 253/82.

Analysis: The units were accepted as separate partnership concerns, but the department relied mainly on common partners, common storage, and shared premises to treat them as a single unit. No evidence was adduced to show that the manufacturing operations, business transactions, management, or clearances of the two units were in tandem or that one unit was merely a dummy of the other. Mere suspicion arising from common facilities could not substitute for proof that the two concerns had merged into one business operation.

Conclusion: The two units could not be treated as one on the evidence on record, and the assessee was entitled to the benefit of doubt. The demand and penalty were set aside, with consequential relief.

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