TaxTMI 
TaxTMI 
2009 (12) TMI 384
X X X X Extracts X X X X
X X X X Extracts X X X X
....red by M/s. SLI, in the name of M/s. SGE as if manufactured by them, the Central Excise officers attached to HPU visited the above units on 7-3-96. 3. During the visit, the officers noticed that the units are situated in adjacent places and both units were having power connection and machineries for manufacture of RTS Grills and other EB line materials. However, the officers noticed that M/s. SGE obtained power connection only on 13-9-95 though the unit was started in 1994. As no documents were available the officers visited their common office situated at 247-A Good shed street, Madurai-1 and scrutinized the records. Scrutiny of records revealed that though M/s. SGE obtained power connection only on 13-9-95 and installed welding machinery on 18-6-95, clearances were found to have been effected in the name of M/s. SGE from 8-2-95 onwards. Hence, the officers collected the available documents in their office under letter dated 7-3-96 of M/s. SLI for further verification. 4. In his statement dated 8-3-96 Shri M.Gunasekaran, Proprietor of M/s. SLI, inter alia, stated that he was running M/s. SLI at 25/20, Konar thoppu, Irvathanallur, Madurai form 1993; that SLI was engaged in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctory; premises; that power connection was obtained to the company on 13-9-95 under S. No. 515 from L.B and prior to that no power supply was made to SGE; that welding plant and power press were the machineries used in production; that power press was purchased from M/s. N.S. Mechanical Works, Ludhiana vide Invoice No. 24 dated 26-10-95; Welding Plant was purchased form M/s. Asian Engineering Company, Madurai vide Bill No. 4516 dated 22-5-95; that prior to power connection obtained by SGE on 13-9-95, RTS Grills were are welded and manufactured by using the power from SLI in their premises; that he had gone through the statement dated 11-3-96 of Shri M. Gunasekaran, he fully endorse his statement and admit the fact; that for manufacture of L.T.3 phase channel cross arm and back clamps they used Hammer, screw and cutter by using human labour; that he was not aware whether purchase of the above tools were accounted in the books of accounts; that the documents submitted by Shri. M. Sukumar, Manager of SLI and brother-in-law of his proprietrix to the officers on 7-3-96 were the real books of accounts of SGE; that for manufacture of RTS Grills in SLI, no consideration was made to them as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iability on the above value of RTS Grills cleared in the name of SGE. (xi) Smt. G. Ganga, Proprietrix of SGE in her statements dated 11-3-96 and 16-7-97 stated that she did not know any thing about the manufacturing activities of SGE and his authorized manager Shri L. Venkatasubramanian was only looking after entire manufacturing and other affairs of the company. (xii) Shri L. Venkatasubramanian, the Authorised Manager of SGE in his statement dated 14-3-96 admitted the fact that RTS Grills cleared in the name of SGE prior to 13-9-95, were are welded and manufactured in the premises of SLI. 10. From the above it is revealed that SGE did not have power connection and welding facility for manufacture of RTS Grills during the period 8-2-95 to 11-7-95. However in the name of SGE RTS Grills valued Rs. 19,19,250/- were cleared to TNEB during the above period. Hence, it is evident that the RTS Grills cleared in the name of SGE were not manufactured at SGE. Shri M. Gunasekaran, Proprietor of SLI has accepted that the RTS Grills cleared in the name of SGE during the above period were manufactured by ARC welding process with welding plant and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s manufactured in SLI and cleared in the name of SGE during 8-2-95 to 11-7-95 for imposing penalty on them under Section 11AC, for contravention of the provisions of Central Excise Rules, 44." 3. After taking into account the detailed submissions and the oral arguments, the original authority confirmed a demand of Rs. 2,36,898/-and has imposed a penalty of Rs. one lakh on M/s. SLI. As regards Shri Ganga Engineering, the other notice, the original authority did not impose any penalty. 4. On appeal by Shri SLI, the lower appellate authority has upheld the order of the original authority and has rejected the appeal filed by the appellants before him with the following observation :- "I have given my careful consideration to the facts and circumstances of the case and the submissions made during the course of personal hearing. The allegation in this issue is that M/s. SGE during the material period. I find from the records that M/s. SGE obtained power connection only on 13-9-95 though the unit was started in 1994. They installed welding machinery on 18-6-95. Clearances were found to have been effected in the name of M/s. SGE form 8-2-95 onwards. Shri M. Gunasekaran, Proprietor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 (127) E.L.T. 789 (Tri.-Del.). He further states that for clubbing of clearances of two units, the department is required to show evidence of common funding and financial flow-back. In this regard, he cites a decision of the Hon'ble Rajasthan High Court in the case of Renu Tandon v. UOl - 1993 (66) E.L.T. 375 (Raj.) and CCE, Jaipur v. Electro Mechanical Engg. Corporation - 2008 (229) E.L.T. 321 (S.C.). The ld. Advocate has also made further written submissions on 16-11-09, subsequent to hearing of the case. In the written submissions, several other case laws have been cited to the same effect that when clubbing of clearances of two units are proposed to be clubbed, show cause notices are required to be issued to both the units. Several other decisions have been cited to the effect that small scale exemption can be claimed at any time and it is also pleaded that the entire demand is time barred. 6. Ms. Indira Sisupal, ld. DR, appears for the department. She states that the impugned show cause notice was issued to both SLI and SGE. She points out that the show cause notice proposes clubbing of clearances of both the units and while demanding duty from SLI both the units have been....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ure and clearance of the impugned goods done by SLI in which her husband was the proprietor. Since no penalty was imposed on SGE, the unit had no necessity to file any appeal before the lower appellate authority or before the Tribunal. In other words, SGE has no grievance in regard to the joint show cause notice issued to both the units. It is SLI which is agitating before us that no separate show cause notice was issued to SGE and on that basis they are seeking to quash the demand confirmed against SLI. 10. In this regard, we find that in a similar case vide Modern Engineering Plastics Pvt. Ltd. v. CCE, Trichy - 2009 (243) E.L.T. 289 (Tri.-Chen.), this Bench has upheld the clubbing of clearances and application of extended period of limitation. We also find that in the case of Bakelite Hylam Ltd., Bombay and another v. CC, Bombay and another - 1986 (25) E.L.T. 240, the Tribunal had held that though the show cause notice was not addressed to the assessees by name, even then it was not as if the assessee was not able to present its case and show cause. In the case of CCE, Meerut v. Star Paper Mills Ltd. -1986 (26) E.L.T. 81, it was held that if the contents of the notice makes th....