2016 (10) TMI 570

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....mon and therefore all the three appeals are disposed of by this common order. Briefly the case of the appellant is that the appellant is a partnership firm with Shri V.S. Manohar and V.U Thambi as partners and are engaged in the manufacture of Uninterrupted Power Supply (UPS) of different capacities falling under chapter 8543.90. M/s. Genesis Power Equipment Ltd. was incorporated on 12.01.1996 with Shri V.S. Manohar and V.U Thambi as Directors and both are registered under the Central Excise. Intelligence gathered by the Director General of Central Excise Intelligence revealed that both the units were controlled by the same persons and there are evidences to prove that there is financial flow back between the units. Therefore a show-cause n....

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....ablish the charge of clubbing. He further submitted that the Additional Commissioner has relied upon the statement of V.U. Thambi with regard to transfer of funds between the two accounts and confirmed the demand on that basis which is unjust and illegal. He further submitted that the transfer of funds between two units was done by the Bank Manager without any specific instructions in this regard by the appellant. He also submitted that the appellant is a partnership firm and M/s. Genesis Power Equipments Pvt. Ltd. is a private limited company and in the eyes of law both are separate legal entities and are eligible for exemption separately. He also submitted that the learned Additional Commissioner has wrongly relied upon the Final Order of....

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....the appellant. Here it is pertinent to reproduce the said findings of the Commissioner (Appeals) wherein he has observed as under: "The appellants maintain that clubbing of two independent units, one being a company and the other a partnership firm is not sustainable in law as well on merits. Yes, I agree. But the units should be really independent. In the present case, the investigation has brought out certain facts which show that the units are not really independent. For example, both the units were floated by the same persons. The partners of M/s. Genesis Instrument Company S/Shri V.S. Manohar and V.U. Thambi are also Directors of the Private Limited Company. The business activities of both these units were looked after by the same pe....

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....aring that mask of not being treated as related person when in fact both the manufacturer and the buyer are the same persons. This is a right case where the corporate veil has to be lifted. I entirely agree with the findings of the adjudicating authority and uphold his order in TOTO." 5.1. Further we also find that there is a specific evidence of financial flow from one entity to another entity and both the entities are being controlled by two Directors viz., S/Shri V.S. Manohar and V.U. Thambi. We also find that keeping in view the facts and circumstances, if we lift the corporate veil then we find that both the entities are one and the same and therefore there is nothing wrong in clubbing the clearances of both the units for the purpos....