TaxTMI 
TaxTMI 
TaxTMI 
2011 (1) TMI 806
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....main raw materials viz. plastic granules was received by the appellants on payment of central excise duty and hence, the appellants started clearing the aforesaid finished products on payment of concessional rate of duty in terms of Notification No. 9/2000-C.E. Accordingly, the appellants got registered with the central excise department with effect from 13-10-2003. The appellants also filed periodical ER1 returns. 5. The aforesaid final products viz. water tanks manufactured by the appellants are different in shapes, colours, sizes, technical specifications, etc. Hence, names were given to the storage tanks such as Tata, Neelkamal, Johnson, Plasto, Vishal, Surabhi, Bajaj (India) etc. These names were loosely referred to as "brand names" by the appellants. 6. M/s Vaibhav Plastimoulds Private Limited (Vaibhav) is another private limited Company. Directors of the said company are Shri R. C. Agrawal and Shri. Vishal Agrawal. Vaibhav also manufactures water tanks at their factory located at Plot J-2, MIDC, Digdoh, Nagpur. However, the water tanks manufactured by Vaibhav are of capacity ranging from 3000 litres to 5000 litres. Vaibhav was set up in the year 2001. 7. In....
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....mmissioner and remanded the matter back to the Commissioner to decide as to which is the real unit from whom duty is demandable. On de novo adjudication, impugned order passed by the Commissioner confirming demand to duty totalling to Rs. 20,49,079/- after allowing cum-duty and cenvat credit to the appellants. The Commissioner has also imposed penalties on the appellants. Hence, this appeal. 10. The ld. advocate submitted that the impugned order is bad in the eyes of law on the following ground namely - (a) It is not a case of clubbing of clearances made by two separate companies. (b) The extended period of limitation is not invocable in the facts and circumstances of the case. (c) As the units are located in the rural area, the appellants are entitled for benefit of SSI Notification No. 8/2002 and 9/2002. (d) The appellants are not clearing the goods under the brand name of others. He further argued in details and submitted as under :- 11. The appellants are a private limited Company registered with the Registrar of companies in terms of the provisions of the Companies Act. V....
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....companies is separate. There is no common director. Hence, this cannot be a ground for clubbing the clearances of two companies. 13. Moreover, merely because both units have common storage tank cannot be ground to hold that the both the companies are one and same. Separate records were being maintained for withdrawal of kerosene and LDO by common storage tank by both the companies. This is the admitted factual position. The common storage tank was installed in order to save cost as both the companies are small scale units. 14. The fact that Vaibhav have no extruder machine cannot, yet again, be a ground to arrive at a different conclusion. It is undisputed that Vaibhav has independent machinery including one clamp shell machine and 1 three arm roll moulding machine for production of storage tank of capacity of 3000 litres to 5000 litres. Extruder machine was not purchased by Vaibhav due to large investment involved therein. Therefore, in terms of job work agreement dated April, 2002, certain goods were manufactured by the appellants herein for Vaibhav on job work basis. However, Ld. Commissioner, surprisingly, is silent on the said job work agreement in the impugned ord....
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....e original officer has certified that the area where the factory of the appellants is located as outside the limits of Nagpur Municipal Corporation and within the village limit of Digdoh. Taluka Hingna, District Nagpur. Similar certificate was also issued by the Sarpanch, Digdoh Gram Panchayat certifying that the factory is beyond Nagpur Municipal area and falls under "Digdoh" village area. He also placed on record certificate issued by the Zilla Parishad, Nagpur. The appellants also produced certificate issued by Tehsildar, Hingna that the factory of the appellants is located in Digdoh village which is a rural area. He further submitted that the adjudicating authority has failed to define notified area committee. In fact he has taken "notified area" in stead of "notified area committee" and held that the factory is located in notified area of MIDC which is not correct interpretation. The Commissioner also has not disputed the certificate issued by various authorities. He also relied on Article 243(c) of the Constitution of India under part 9 which defines the term "village" has the village specified by the government or public notification to the village and article 243P (C) of th....
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....ibunal. He also submitted that all the activities relating to right from purchase of raw material storage account having sales of finished goods were managed and controlled by Shri Ramesh Agarwal, the director of Vaibhav. The investigating team has established that both the units are separate on paper but in fact both the units are a family concern and same are managed by a single person. Hence, the impugned order has correctly clubbed the clearance of both the units as one. The clearance made by both units are to be clubbed, he also relied on the decision of Modi Alkalies reported in 2004 (171) E.L.T. 155 (S.C.) and Navrang Art Printers - 2010 (251) E.L.T. 267. He farther drew our attention to the fact that the appellants have suppressed the fact that both the units namely Plasto and vaibhav are managed by a single person and a family concern and this fact has not disclosed and the same has only came to know at the time of investigation. These facts have been suppressed. The adjudicating authority has rightly invoked the extended period of limitation. 23. With regard to the rural area exemption, the ld. DR submitted that the factory of the appellants are located is an area n....
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.... facts. Whether the appellants has disclosed the fact that both the units namely appellants units and Vaibhav family concern and are managed by Shri Vishal Agarwal and they can be clubbed together is suppressed is to be decided later on after deciding the issue of clubbing. Hence, the issue of clubbing of units is taken now. 29. The ld. advocate has submitted that the appellants are a private company and registered with Registrar of Company under Companies Act having two directors namely Ms. Rajni Agarwal and Ms. Urmila Agarwal and Vaibhav is also a private company registered under the Companies Act having two directors namely Shri Ramesh Agarwal and Shri Vishal Agarwal. The documents relating to registration of their companies and the certificate of registration issued by the Registrar of Companies are on record. It is also on record that there are no common directors. Both the companies are independently registered with sales tax department and filing independent sales tax returns. They are also registered with income tax department and filing income tax returns separately. Both the companies are maintaining their book of accounts accordingly independently having balance sh....
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....angements and free flow of finance between themselves. On these set of facts, the Hon'ble Supreme Court upheld the view taken by this Tribunal that there was mutuality of interest and inter-dependence between the three units. However, in the facts of the present case, no such factors exist to hold that there was mutuality of interest between appellants and Vaibhav. Both are private limited companies. There is not even an allegation in the show cause notice to the effect that they have common credit facility, common clearance, common vendors, common market arrangements and common machineries used between the two companies so as to prove inter-dependence Hence, the said decision cannot be held to be applicable in the present case. In fact in that case Apex Court relied upon Circular No. 6/92 dated 29-5-1992 which clarifies that each limited company is a manufacturer by itself and will be entitled to a separate exemption limit. The adjudicating authority has lost sight to give any finding on these. 31. In the case of Jifcon Tools Private Limited v. CCE - 2007 (208) E.L.T. 345 (supra) wherein it was held that the clearances of private limited companies cannot be clubbed. Further ....
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.... (150) E.L.T. 359, this Tribunal held that Shakti Steel Pipes cannot be called a camouflaged unit on the ground that there existed a common boundary wall and common management and the wall separating the two Units is only three to four feet ahead and there existed common Memorandum of Articles and a common Balance Sheet. The assessee in that case did not deny these facts. However, the Tribunal held that Shakti Steel Tubes is a sister concern of M/s. Shakti Tubes Limited, was independent factory having its own complete machinery required for galvanization and engaging its own independent staff. The transactions between the two companies were at arm's length and on principal to principal basis and thus, the tribunal concluded that Shakti Steel Pipes Limited was not a dummy Unit. The appeal in that case are rejected by the Apex Court. 32. In the case of Studioline Interior Systems Pvt. Ltd. v. CCE - 2006 (201) E.L.T. 250, this Tribunal held out of the three units, two were Private Limited Companies and one is a Partnership firm. Each unit had its own premises and was registered with Central Excise and Sales Tax Authorities. In these circumstances, the Tribunal held that the clea....
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....short 'MGCPL'), Shri Chamundi Gas and Chemicals Pvt. Ltd. (for short 'SCGCPL') and M/s. Nippon Gas and Chemicals Pvt. Ltd. (for short 'NGCPL'). All the three front companies were in vicinity of the factory of MACL. What in reality happened was that through pipelines Hydrogen gas was sent to the three front companies for compressing and bottling the gas. The sole object was to avail benefit of exemption given to small scale industries under the Central Excise Notification No. 1/93, dated 28-2-1993 and thereby evade payment of central excise duty. With a view to unravel the truth, Director General of Anti-Evasion (for short 'DGAE') searched the factory and office premises of MACL and the three front companies on 27-9-1996. It was found that all the three bottling units were located in one single shed and were separated from each other by small brick walls of about 4 ft. height. The Directors of the three front companies were employees of either MACL or other Modi Group of companies and they were frequently changed. They had common staff for maintenance of records, and operation of the units. The main plant and machinery i.e. cylinders had been supplied only by MACL and the total fina....
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....s are somehow different. In that case this Tribunal has found having flow back in the case of 2-3 instances and in that case Navrang Art Printers (NAP) was situated at 108, 230, 231 and 233 Champaklal Indl. Estate and the other two units were not registered with the Central Excise at all. In that case, the two units were partnership firm and the third was a limited company having common directors and directors were having no knowledge of any business. That is not in this case. Moreover, from the records it is observed that both the companies were having Central Excise Registration separately. It is a fact that at the time of investigation Vaibhav was not having Central Excise Registration. The show-cause notice was also issued to club the clearance of Vaibhav with the appellants firm. We do not understand how Vaibhav was given separate Central Excise registration when on the department wants to club Vaibhav with the appellants firm. It clearly shows that the department has also found that appellants and Vaibhav are two separate entities. 35. From the above discussion, we hold that as both the units are having separate directors, separately registered with Registrar of Compani....
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....pality, municipal corporation, notified area committee, town area committee or by any other name) or cantonment board and which has population of not less than ten thousand according to the preceding census of which the relevant figures have been published before the first day of previous year. 40. From the above definition, it is clear that "notified area committee" is used in conjunction with the term municipality. During the course of argument also the ld. DR that the area under "municipal corporation" is also excluded from rural area, as the factory of the appellants falls within the jurisdiction of MIDC which is a corporation, hence cannot be termed that the factory of the appellant is located in rural area is, totally irrelevant. In fact the ld. DR fails to give the correct interpretation to "municipal corporation" as the municipalities has been defined in part 9 of the Constitution of India which defines municipal area as territorial area of the municipality as notified by the governor. Article 243(g) of the Constitution of India defines the term "village" as a village specified by the Governor by publishing Notification to be village. The terms "municipal corporation"....