TaxTMI 
TaxTMI 
2012 (11) TMI 690
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....laging their identity as a facade unit with sole purpose to irregularly avail SSI exemption with intent to evade payment of Duty on goods manufactured and cleared by their own registered premises. b) The Hon'ble CEGAT has erred by not appreciating that M/s Xenon is a facade for the purpose of Notfn. No.175/86-CE only which can not extinguish their liability to observe Central Excise provisions. c) Hon'ble CEGAT appears to have not appreciated that the decision of the Hon'ble Supreme Court reported in 1997(92) ELT451 relates and restricts to liability to pay the Duty demanded. It will be appropriate to take note of the fact stated in the Reference Application itself, which are as under: M/s Xenon, Adityapur, Jamshedpur (hereinafter refer....
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.... CER'44. The Commissioner of Central Excise, Jamshedpur confirmed the duty demanded vide his O/O no.34/Commr/97 dt.22.10.97 issued on 24.10.97. He also imposed a penalty of Rs.2.5 Crores on M/S SECO and Rs.1 Crore on the assessee under Rule 173Q, a penalty of Rs.2000.00 each under Rule 9(2) and a penalty of Rs.2000.00 each under Rule 226 of the CER'44. The liability against M/S SECO have been settled under KVSS'98 and settlement Certificate in Form 3 has been issued to M/S SECO on 03.05.99. The CEGAT, Caltutta vide its order no.A-943/CAL/2000 dt.07.07.2000 disposed the appeal of M/S SECO as the disputes have been settled under KVSS'98. The CEGAT, Calcutta vide its order no.A-1200/CAL/2000 dated 03.08.2000 allowed the appeal of the asses....
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....clearances of M/s SECO and M/s Xenon are liable to be clubbed together in terms of the provisions of SSI Exemption Notification No.175/86-CE dated 1.3.1986 as amended and 1/93- CE dated 28.2.1993 as amended for the purpose of determining the duty liability. The adjudicating authority therefore ordered that M/s SECO to pay the deferential duty of Rs.16,27,340.74 paise. The penalty of Rs.2.5 Crores has been imposed upon M/s SECO with a separate penalty of Rs.2000/- under Rule 173Q and Rule 9(20 of the CER'1944 respectively. In addition to above, a penalty of Rs. One Crore was imposed upon M/s Xenon under Rule 173Q of CER'1944. A question arises in this Tax Case is whether in a case one company is declared to be dubious company of another and....
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....ners and or Directors and then in that situation, observed that "having regard to his conclusion that all the units other than Gajanan Weaving Mills were fictitious units, the sequitur one would have assume could only be that it was Gajanan Weaving Mills which was the assessee and liable to pay the demand". The Hon'ble Supreme Court has further observed that by confirming the demand upon all the seven units, the Collector appears to have treated them all as assessee and, implicitly, recognized their independent existence. The Supreme Court has not decided the issue whether any penalty can be imposed upon such dubious company whose existence cannot be denied because of the reason that the said dubious company in fact existed and obtained th....
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.... them opportunity so that they can show that they separately did the transactions under consideration. The Revenue itself fully satisfied that they did not do the manufacture and clearances separately, but it was the total transactions done by the M/s SECO in terms of the provisions of the Notification No.175/86 -CE dated 1.3.86 and 1/93.Therefore, all the transactions and the exemptions sought were treated to be the transactions undertaken by the M/s SECO, and therefore, after recording such finding, the liability of duty has been found to be of M/s SECO. If the arguments of the learned counsel for the Revenue is accepted that mere because of the existence of the dubious company, the said dubious company be treated to have undertaken the ....
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....Fabrics Distributors' case, the Hon'ble Supreme Court has questioned the two findings recorded by the Collector viz -a-viz finding recorded by the tribunal. The Collector held that the seven units are only a corporate for facade, both have registered with the various authorities with a view to camouflage with the actual identity and thereby availed the exemption which, otherwise, cannot be inadmissible to them. This finding was upheld by the tribunal. This finding also clearly indicate that in this case also seven companies /firms were in existence and they obtained the exemption certificate,but, for the purpose of benefit of M/s Gajanan Fabrics Distributors, and therefore, they were declared to be fictitious company/firms. The Hon'ble Supr....