TaxTMI 
TaxTMI 
2010 (7) TMI 854
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.... 13-4-09 passed by CCE(Appeals), Delhi-II and also for stay on their recovery till the disposal of the appeals. The facts giving rise to these appeals and the stay applications are, in brief, as under : 1.1 M/s. Servokon is a private limited company with Shri Kamruddin and his wife Smt. Fatima Begum as its Directors. This company is engaged in the manufacture of Voltage Stabilizers, CVT and Variacs chargeable to Central Excise Duty under sub-heading 8504.00 of the Tariff. The goods being manufactured were being sold under brand name 'SERVOKON'. The unit had Central Excise Registration and was availing the benefit of SSI exemption under Notification No. 1/93-C.E., date 28-2-93. There is another unit in the name of M/s. Powerkon Systems located at 52, Ganesh Park, Rashid Market, Delhi (hereinafter referred to as M/s. PS) with Smt. Fatima Begum as its owner and this unit is also manufacturing Voltage Stabilizers under the brand name 'SERVOKON'. During the period of dispute, M/s. PS was not having any Central Excise Registration but had filed a declaration claiming exemption from licensing in terms of Rule 174 of Central Excise Rules, 1944 as it claimed to be fully exempt from ....
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....at the power connection is installed only in the premises at 54, Ganesh Park i.e. at the premises of M/s. Servokon and the supply to 52 Ganesh Park is from the power connection of M/s. Servokon; that fabrication work was also being done at the godown of M/s. Servokon; that Sh, Manjoor Alam was a part time Accountant and he might have taken the records of both the units at his residence and that he was maintaining both the firms' records. Since from investigation it appeared that in order to evade duty, the manufacturing activity had been split up into two different units and that if the clearances of two units are clubbed, they would not be eligible for SSI exemption, a show cause notice was issued for proposing - (a) clubbing the clearances of M/s. Servokon Systems and M/s. Powerkon Systems for the purpose of determining the Central Excise Duty liability of M/s. Servokon Systems and also recovery of differential duty amounting to Rs. 20,11,317/- alongwith interest on it at the applicable rate from M/s. Servokon; (b) imposition of penalty on M/s. Servokon under Section 11AC of Central Excise Act, 44 read with Rule 173Q of Centra....
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....stence, that merely the fact that the Directors of M/s. Servokon are husband and wife and M/s. PS is the proprietorship concern of one of the Directors(wife) is not sufficient to hold that the two units are not separate entities; that the allegation that the two units were using a common a labour pool and common staff pool is not factually correct; that M/s. Servokon and M/s. PS had their own independent system of procurement of raw-materials; that M/s. PS were engaged in the manufacturing operations carried out with non-power operated hand tools where not much power was required and whatever little power requirement of M/s. PS was there, the same was met by generator installed in their premises; that the balance sheet of M/s. Servokon and M/s. PS makes it very clear that they have own and separate financial arrangements; that M/s. PS had never used the brand name 'SERVOKON', which belongs to M/s. Servokon; that the Commissioner(Appeals) has ignored the fact that the original adjudicating authority while deciding the case against them, did not supply certain relied upon documents; that there was no justification for imposition of penalty on Sh. Kamruddin, Director of M/s. Servokon ....
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....on, penalty has been rightly imposed on M/s. Servokon under Section 11AC and on Shri Kamruddin, Director of M/s. Servokon under Rule 209A of Central Excise Rules; that the Department has a strong prima facie case and that in view of this, this is not a case for waiver from the requirement of duty demand, interest and penalty. 3. We have carefully considered the submissions from both the sides and perused the records. Though M/s. Servokon is a private limited company with Sh. Kamruddin and his wife Smt. Fatima Begum, Directors and M/s. PS is a proprietorship concern of Smt. Fatima Begum, as admitted by Sh. Kamruddin, Director of M/s. Servokon, both the units were being managed by him only. The Appellants have not denied that M/s. PS did not have any power connection and the power to this unit was being supplied from M/s. Servokon for which no payment was being made. Similarly, we find that the staff as well as the labour pool of both the units was common and Sh. Kamruddin in his statement has admitted that the staff and labour was being deployed from the common pool wherever the same were required. The goods manufactured in these two units were sold under the brand name "SER....