TaxTMI 
TaxTMI 
1999 (11) TMI 673
X X X X Extracts X X X X
X X X X Extracts X X X X
....y clubbing the clearances of the appellants with the clearances made by other two units working at the same premises under the name and style of M/s. Konark Pumps & Presses (P) Ltd., and M/s. Konark Wood Works. 2.1 Shri S.C. Mohanty, ld. Advocate appearing on behalf of the appellant submitted that the appellant is a manufacturer of LPG cylinders in its factory located at the Mancheswar Industrial Estate of Bhubaneswar. LPG cylinders manufactured by the appellant are exclusively being supplied to three Public Sector Oil Companies, i.e., (i) Indian Oil Corporation Ltd., (ii) Hindustan Petroleum Corporation Ltd., & (iii) Bharat Petroleum Corporation Ltd. 2.2 The appellant commenced production of cylinders in the month of Octobe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ries Centre, Bhubaneswar, Ministry of Industry, Govt. of Orissa, as small scale units. (c) Separate Books of Accounts and Balance Sheet certified by Chartered Accountants under the Companies Act. (d) Separate registration certificates under both State and Central Sales Tax Acts. (e) Separately assessed under the Sales Tax Laws. (f) Separate income tax assessees. (g) Separate agreements with the State Electricity Board for supply of power. (h) Separate certificates of registration under the Factories Act. (i) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....um of power to the other units; some minor contradictions in the statement of Shri Amarendra Kr. Mohanty in the matter of payment of rent for portion allotted by M/s. Konark Wood Works; the entries made in the rough cash book showing payment of salaries etc., to the employees of the other units etc. He submits that the findings were based on extraneous circumstances inasmuch as all the three units were independent units as is evident from the various factors narrated above. He also draws our attention to a number of decisions and judgments of the Tribunal which are to the effect that common premises, sharing of power, common directors and occasional financial transaction by themselves are not sufficient to hold that the other two units were....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ufacturing activities. In these circumstances, he prayed that the question of clubbing of clearances of the three units does not arise at all. 3. Countering the arguments, Shri R.K. Roy, ld. JDR, reiterated the reasoning of the Commissioner of Central Excise. It was urged that there is ample evidence on record to show that the three units were not independent legal entities and the appellant was having interest in other two companies and was guiding and controlling force behind the same. He submitted that merely because the other two units were separately being assessed to income tax and sales tax, is of no consequence and the evidences discussed by the Commissioner establishes beyond doubt the existence of mutual interest including....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Registrar of Companies, Ministry of Industries, Central Sales Tax authorities, Income Tax authorities and the State Electricity Board for supply of power. 5. The Commissioner in his impugned order has referred to the fact that the power is being shared by all the units and there is contradiction in the statements of various persons. However, we find that whereas the appellant had maintained that the cost of power being supplied to M/s. Konark Pumps & Presses is to be adjusted against their bills, the later has stated that payments were being made to the appellant as they have separate distribution system though not separate metres. This can hardly be called a contradiction in the version of the two units. Both have agreed that the u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing of common premises or renting of land to another unit or sharing in the matter of power, occasional financial transaction or labour, hiring etc., is required. It has nowhere been observed by the Commissioner that M/s. Konark Pumps & Presses Pvt. Ltd., were not fully equipped for the manufacture of T.V. cabinets in their factory. The said unit is a company incorporated under the Companies Act and acquired an independent status because of the said factors. No doubt piercing of corporate veil is permissible under the law but it must be proved on record that the second unit is only a make-belief arrangement and is only on paper and is façade. It has been held in a number of cases that when the units have distinct identities, they are....