TaxTMI 
TaxTMI 
1984 (7) TMI 270
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.... Shri Rasheed and that both units are one and the same in so far as the manufacture and proprietary interest was concerned. For these reasons it was held that the units are not entitled to the concession of Notification No. 80/80-C.E. Consequently the demand for duty and the confiscation were ordered and the penalty imposed. The prayer before us is to set these aside. 3.  We shall be examining in detail these and some other points which appellants have raised in the memorandum of appeal. It will be appropriate to refer to the Collector's order at this stage to see the grounds on which he decided that the two units namely Unity and Quality were one and the same and that their clearance had to be clubbed for the purposes of Notification No. 80/80. Reasons for the Collector's decision can be broadly listed as follows : (i) Smt. Inayathunnisa, wife of the appellant, executed a General Power of Attorney in favour of her husband who is carrying on manufacturing activities of both units. (ii) The land and building where the Unity factory is situated is owned by Shri Abdul Rasheed the appellant and was taken on lease in 1970. The land where Unity is housed was purchased by the appe....
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....ies. A Central Excise Licence No. L. 48/77 was obtained by her in the name of Unity Steel Industries. (ii) Declaration under Notification No. 111/78 C.E., was being submitted by both Units. Unity Steel Industries (here-in-after refer to as Unity) was maintaining accounts in Form R.G.1 and was submitting monthly returns and Annual returns like R.T. 12 etc. In terms of Notification No. 80/80 no Central Excise Duty was being paid. (iii) Unity paid rent to Smt. B.L. Jayamma directly. However, receipts were obtained from the owner in the name of Shri Abdul Rasheed (appellant) as it was he who took the land on lease. This amount was debited to Unity Steel Industry. (iv) Power connection was initially obtained in the name of the appellant who originally occupied the premises but electricity charges were paid by Unity directly to the State Electricity Board and the amount so paid were debited to Unit's account. (v) Similarly the Telephone was installed when the appellant occupied the premises and continued to remain there till Unity came into existence. (vi) Unity had its own workers and power connection and completed all the processes of manufacture of Steel furniture up to 31-3-1982....
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....the penalty sustainable? 8.  As the first two questions are inter-related and inter-dependent, we discuss them together. As mentioned earlier the appellant advanced many points about the telephone bills, electricity bills, payment of rent, use of Quality key-holes for Almirahs manufactured by Unity, etc. But the main argument which is to be considered in depth is the one that the two units are independent of each other and therefore, both of them are entitled to the concession provided in the Notification No. 80/80-C.E., separately. That the two units have been separately registered for the purpose of Sales Tax and Income Tax is not disputed. However, we do not think that merely registering the units separately would give a right to the appellant to claim that the two units are independent for the purpose of Notification No. 80/80 and that they can claim the concession given thereunder separately. This notification extends the concession to goods cleared for home consumption by or on behalf of a manufacturer from one or more factories. Therefore, the real question to be decided is whether clearances from Unity (as also Quality) were by or on behalf of Shri Rasheed or not. 9.....
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..... In our opinion the General Power of Attorney given by Smt. Inayathunnisa (wife) to her husband Shri Rasheed (appellant) is of much more significance in deciding as to whether the clearances from Unity were or were not on behalf of the appellant. This Power of Attorney gives very wide powers to the appellant to act on behalf of Unity. All affairs of Unity, including financial, legal proceedings, tax affairs, accounting matters management of the entire responsibility of her firm and sale, exchange, lease or disposal of any of her property belonging to Unity are some of the powers conferred by this Power of Attorney. This Power of Attorney does not leave much doubt as to who was the real person looking after Unity. It is also obvious and not disputed that the Central Excise documents for Unity were being signed by the appellant. The reasons given for this is that the proprietrix being a Muslim lady gave a General Power of Attorney in favour of her husband. 13.  We also note that as recorded by the Collector in his order Smt. Inayathunnisa in a statement dated 19-10-1982 deposed that she does not know anything about the day-to-day affairs of M/s. Unity and that her husband Shri....
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....ntral Excise duty that may be demanded I am prepared to pay the same. I assure you that I will also obtain the required Central Excise licence and observe all the formalities. Though there are two units they are coming under small scale industries. The industry has to compete in the market for survival and I am having a big family with minor children, a lenient view may kindly be taken for the acts of omission and commission." 16.  These extracts do not leave any doubt that whatever be the other circumstances regarding capital, registration under other laws etc., Shri Rashid was the person on whose behalf production clearance, sales etc. all took place. These are by him and for his benefit which is to say for the benefit of his own and that of his family consisting of his wife and 11 children. We therefore, answer the first question in the affirmative and second question in negative. 17.  The appellant has submitted that demands for duties pertaining to the period 1980-81 and 1981-82 were time-barred. In support of this plea the appellant argued that as there was no clandestine removal of goods, Rule 9(2) could not be applied. As the appellant maintained Central Excise ....