TaxTMI 
TaxTMI 
1999 (10) TMI 209
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....t Industries, M/s. Avon Plast Industries and M/s. Film Plast Packaging. 2.  According to the Revenue, M/s. Amar Plast Industries (respondents), M/s. Avon Plast Industries on reaching the exemption limit deliberately and wilfully fragmented their units by sharing finance, shed, machineries etc. and created a new unit, namely, M/s. Film Plast Packaging with the sole and mala fide intention of evading Central Excise duty on the goods manufactured by them by taking advantage of Notification 175/86-C.E., dated 1-3-1986 as amended. They deliberately suppressed the material facts about the formation of M/s. Film Plast Packing from the Central Excise department. All these three units exchanged loans and utilised machines of one another. The....
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....ries. 3. The Collector of Customs through the impugned order disallowed the clubbing of the clearances of these units by holding that there was no reliabale evidence to prove that these units were in fact one and the same in the eyes of law. However, he imposed penalty of Rs. 50,000/- on each of these units for contravention of provisions of Rule 173Q and 209A. 3. The Revenue has filed the present appeals against the above referred impugned order of the Collector only for challenging its correctness to the extent of not allowing the clubbing of clearances of three units. 4. We have heard the learned Counsel and the learned JDR. 5. The clubbing of the clearances of the three units named above had been sought b....
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....t partnership deeds and there exists neither flowback of the profit nor the control of any one person over the management of the units. To corroborate this plea they have also adduced the evidence to prove that they had been charging interest at the rate of 18% on differential amounts and that interest was settled by issuing debit notes to the respective accounts. They had also produced evidence to show the receipt of deposit/finance from various individuals, banks at the annual rate of 18%. Their version had, therefore, been rightly accepted by the Collector for holding that they are all independent units. 8. It has not been disputed by the learned JDR that proof of financial flowback was essential for claiming the clubbing of the ....
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....een ruled as under: "Giving of a common telephone as address by the three firms which consist of relations, when telephones are difficult to get in bigger cities, use of table space by one firm in the shop cum office of another, which is a common practice in commercial terms; use of common telegraphic address, which is used by a number of shops in the same complex, location of the three factories in the same compound within the knowledge of the excise authorities, commonness of partners; occasional use of buffing machine of one firm by other and mutual financial transactions without charging of interest etc. are not conclusive circumstances to show that the clearances of the appellants were for and on behalf of the others. While some of ....