TaxTMI 
TaxTMI 
1992 (7) TMI 186
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....985. On this account, it was alleged that duty amounting to Rs. 14,84,436.20 was recoverable. 3. In the impugned order the Collector observed that there was a common effluent treatment plant and there was a common attendance register for both units which were located in the same premises and the same person was handling the correspondence relating to procurement of raw material on behalf of both the units. He also observed that two units had common workers and the same selling agent. On these grounds and also for the reason that no part of the interest free loan of Rs. 57,000/- advanced by M/s. Prabhat Dyes and Chemicals to M/s. Amber Dyes and Chemicals in 1982 had been paid back, the Collector held that the two units constituted a single entity and confirmed the demand for a period of 6 months prior to the date of show cause notice. 4. On behalf of the appellants we heard the learned advocate Shri K. Swamy with Shri K. Umapathy, advocate. Shri Swamy stated that the Collector's finding that the two units had to be treated as one and the same for the purposes of concessions in terms of Notification Nos. 44/82 dated 1st March, 1982 and 175/86 is erroneous. He contended that eac....
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....factors outlined in the Collector's order were clearly indicative of the fact that the two units were not independent. In support of his contentions he cited the following case law:- (i) Priya Corporation v. CCE -1990 (48) E.L.T. 26 (Tribunal) (ii) Balamurgan & Balamurli v. CCE, Madras -1988 (38) E.L.T. 54 6. We have examined the records of the case and considered the submissions made on behalf of both sides. The only question that arises for determination in this case is whether on the basis of the facts on record the two units could be deemed as one and the same entity. It is seen that the considerations on the basis of which the Collector arrived at the finding that the two units could not be treated as separate entities were the following :- (i) The units were controlled by persons who were closely related. (ii) They had a common office and were located adjacent to each other. (iii) They were engaged in the manufacture of same goods through deployment of similar machinery. (iv) The units had some common workers and a common attendance record which was being maintained by the same person. (v) Raw materials for both units acquired by placing combined order....
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....gainst one another on the transaction when they were doing so against others, could not be a conclusive circumstance to find against the appellants that their clearances were for and on behalf of one another". Since in the appellants' case there is no evidence of any flow back of profits we are inclined to agree with the appellants that the two units cannot be treated as one and the same merely on account of a part of the working capital of one of them having been provided by the other in the form of an interest free loan. 8. In arriving at the finding that the two units were not separate entities and their production had to be clubbed together for the purpose of the exemption available to Small Scale Units in terms of Notification Nos. 44/82 dated 1st March, 1982 and 175/86, the Collector took note of the fact that some workers employed in the concerned units were common and a single attendance register for both units was being maintained by the same person. The Collector also observed that the raw materials for both the units were being acquired by placing combined orders and they were being stored together in the same place. In this regard the appellants have claimed that eac....
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....d, therefore, finds that on the facts and circumstances of the case the exemption under Notification No. CER-8(28)/56, dated 5-1-1957 was not available to the goods produced in the 4 units during the material time as correctly held by the Collector." 7. Shri Gopal Prasad contends before us that these findings of the special officer, which had been accepted by the Board also, were incorrect. His argument was generally to the effect that whenever there were common purchases, to be utilized by the four units subsequently independently, such a common purchase was for proper reasons and that such purchases were accounted for in respect of each of the four units independently with reference to the quantity used by them independently and thus there was no common benefit derived which was not accounted for. He pointed out that at the relevant time the minimum unit of sale by the mills in respect of beams was one set of 10 beams and that none of the four units independently had need for purchase of such a single set of 10 beams and therefore after purchase of a set of 10 beams by one or the other the same was subsequently shared amongst the 4 units, such use being properly accounted and,....