2017 (3) TMI 919

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....le industry exemption based on turnover. The case of the Revenue is that these units (other than M/s Kores), were only dummy units and accordingly the clearance of these units are to be considered together to reckon turnover and to decide the tax liability. 2. The dispute has a long history. Certain investigations were conducted in October 1996 against M/s Kores (India) Ltd. On completion of investigation show cause notices proposing clubbing of clearances of 4 different SSI units, alleged to be dummy units of M/s Kores, were issued. The said demand notices were confirmed by order dated 30/03/1998. On appeal, the order was confirmed by the Tribunal except waiver/modification of penalty. The case was taken up before the Hon'ble High Court of Madhya Pradesh in 8 writ-petitions. The Hon'ble High Court vide order dated 17/11/2005 remanded the case to the Original Authority alongwith certain guidelines, to decide the case afresh. In the meantime, three more appeal pending in Tribunal on the same issue, for the subsequent periods, were also remanded to the Jurisdictional Commissioner by the Tribunal to decide all cases together. However, before the receipt of these remand cases from t....

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.... wages. Even costing of final product is done by M/s Kores. The SSI units were supplying almost all their entire production to M/s Kores. The evidences adduced by the Department with reference to earlier proceedings are very much relevant to the current proceeding for later period also ; (iii) The Commissioner is not correct in his conclusion that there is no flow back of money. When the units were proved to be dummy units there is no need to show evidence of flow back, as such material evidence will not be available to the Department ; (iv) M/s Kores, alongwith the 4 SSI units were a single entity, but conventionery fragmented into a limited companies on paper for deriving tax benefits of SSI exemption. By merely changing some Directors and making some cosmetic changes here and there, it cannot be said the SSI unit become independent and their transactions with M/s Kores were on principal to principal basis ; (v) M/s Kores financed the share capital of each of the 4 SSI units and also stood guarantee for sanctioning of the loan. The Directors of the companies were employees or relatives of employees of M/s Kores. M/s Kores had more than ordinary interest in the financial ....

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....nger case for the respondent in view of certain changes in the circumstances. These changes are mainly with reference to the appointment of new Directors from time to time for the small scale units; the SSI units stopped buying wire from M/s Kores; Lt. Col. Harbhajan Singh and Shri Reji Anthony whose roles were extensively quoted in the previous proceedings had resigned and left M/s Kores.   Even during his presence Shri Singh was looking after total quality management which cannot be considered as overreaching management control of all units. Further, the demand in the present proceedings also suffers serious legal infirmity to the extent that the same has been raised against M/s Kores and SSI units jointly and severally. This clearly shows that the Revenue itself is not clear about the Central Excise liability to be collected from a specific unit denying the benefit of SSI notification. 6. We have heard both the sides and examined appeal records. We note that on similar set of facts for the earlier period, the Tribunal examined the issue and held vide final order dated 10/09/2015 that the independent existence and legal identity of the SSI units have not been disput....

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....were paying rent as per commercial consideration and the other shared facilities were on lease basis. Regarding M/s Kores standing as guarantor for the loans it was submitted that one of the SSI unit got the loan from M/s Birla Global Finance Limited and M/s Kores stood guarantor for the lease hold loan. The cost of machinery purchased by M/s Neptune on IC sales from M/s Kores was paid from the loan taken. 8. We find that M/s Kores were interested in having quality final product at competitive price. To this effect, if they had certain conditions imposed on the SSI units who manufactured the items, this by itself cannot lead to the presumption of overreaching financial or administration control on these units. Revenue relied on the decision of the Tribunal in Unique Resin Industries (supra) and Hon'ble Supreme Court in Calcutta Chromotype Ltd. vs. CCE, Calcutta reported in 1998 (99) E.L.T. 202 (S.C.). We note that these decisions dealt with either common financial involvement, common control or supervision in respect of all units and also with reference to lifting of corporate veil of a company to decide their independent existence. We note that the thrust of the Revenue in plac....