TaxTMI 
TaxTMI 
2017 (5) TMI 277
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....ief facts of the case are that during the period under consideration M/s Scientech Technologies Pvt. Ltd., Indore were engaged in the manufacture of Oscilloscopes and Micro Wave Components chargeable to central excise duty under Chapters 90 & 85 respectively of the Central Excise Tariff. They have another premises at 90-91, Electronic Complex, Pardesipura, Indore where they have trading division. Sh. Amrish Kela is the Director of M/s STPL and this unit was functioning since 1984. M/s STPL is availing SSI exemption. There is another unit called M/s NVIS Technologies (hereinafter referred to as NVIS) with Shri Amrish Kela as Proprietor which functions at the part of the premises at 90-91, Electronic Complex, Pardesipura, Indore. M/s NVIS man....
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....en manufactured by them and neither at 90-91, Electronic Complex, Indore nor at M-227, Veena Nagar, Indore which is the address in their central excise registration. There was not enough space to accommodate the machinery and in fact at M-227, Veena Nagar only some hand tools were found. 4. In view of the above, it appeared that M/s NVIS is a dummy unit and part of the goods manufactured by M/s STPL were being shown as manufacture of M/s NVIS so that both the units can avail SSI exemption. 5. In view of the above facts, show cause notice dated 18.08.2008 was issued for- (a) clubbing the clearances of M/s NVIS with the clearances of that M/s STPL for determining their eligibility for SSI exemption and on that basis, recovery of duty amoun....
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....cate for the appellant pleaded that M/s STPL and M/s NVIS are two independent companies M/s STPL is a private limited company of which Sh. Amrish Kela is a Director, and M/s NVIS is a Proprietary concern of Sh. Amrish Kela, is a proprietor. It is settled legal position that just because some directors or partners are common between two entities, the same cannot be treated as one and the same, that M/s NVIS had the required machines for manufacture of the microwave components and the goods seized had been manufactured by M/s NVIS and not by M/s STPL, that the final product of the two entities were different, as while M/s STPL were mainly manufacturing Oscilloscopes and Micro Wave Components, that M/s NVIS cannot be treated as another factory....
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....ortion of the premises under the control of M/s STPL, that the goods claimed to have been manufactured by M/s NVIS started manufacturing activities in the premises at 90-91, Electronic Complex, Indore. The electricity consumption of M/s STPL increased greatly. The above facts show that M/s NVIS is fully controlled by M/s STPL and hence, the duty has been rightly demanded from M/s STPL by clubbing their clearances with those of M/s NVIS and penalty has been rightly imposed on M/s STPL and M/s NVIS. 11. We have considered the submissions of both the sides. While M/s STPL is a Private Limited Company with Shri Amrish Kela as its Director M/s NVIS is a proprietary concern of Sh. Amrish Kela as its proprietor. While M/s STPL is manufacturing Os....
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....k of funds from one unit to another then the clubbing is not permissible. He also relied on the ratio laid-down in the case of Indore Steel Casting P. Ltd. Vs. CCE, Indore - 2015 (317) ELT 556 (Tri. Del.) where it was observed that- "8. Tribunal in the case of CCE, Kanpur vs. Sharad Industries -2013 (294) ELT 561 (Tri-Del.) has categorically observed that the prime requirement of clubbing of clearance of two units is not having complete independent machinery and infrastructure to manufacture the goods. If both the units are complete by itself, capable of manufacturing the goods without any help from the other unit, and are independently registered with the sales tax, industries registration, Income-Tax Registration and having separate elec....