adjustment of demand with other unit

[Arun Aggarwal]

Sir

we have two units registered with central excise in which one of the partner is common and are in the same range of excise.

Excise officials wants to adjust/ hold the refund of one unit because of the demand in the other unit being having a common partner.

Both the units are manufacturing different products.

Pls advice the legal course of this situation.

Arun

AI Summary

Separate entity treatment prevents adjusting one firm's refund for another firm's tax demand; challengeable by appeal.
Mere commonality of partners between two excise-registered units manufacturing different goods does not justify withholding or adjusting a refund of one unit for a demand against the other. Circular 6/92 and tribunal reasoning treat firms with only some common partners as separate manufacturers entitled to separate exemption limits; only where a quasi-judicial proceeding determines both units to be the same may clearances be combined. The appropriate remedy against an unlawful adjustment or denial of refund is an appeal.