TaxTMI 
TaxTMI 
2018 (5) TMI 874
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....hese are disposed of through this common order for the sake of convenience. 2. Shree Bherav Diamond Tools Pvt. Ltd. alongwith four other manufacturing units and three trading units were issued show cause notices on 08/04/2015 and 07/05/2015 which were adjudicating by the Commissioner vide this common order. In the order he held the following : A. In respect of show cause notice No. V(82)Adj./UDR/83/2015/75-90 dated 08/04/2015 : (i) Determined and confirmed the demand of Cenvat Excise duty amounting to Rs. 2,91,28,460/- against Shree Bherav Diamond Tools Pvt. Ltd. and its related manufacturing firms namely (i) Shree Bherav Engineers (ii) Shree Bherav Diamond Impex, (iii) Shree Bherav Tools Corporation and (iv) Shree Bherav Amla Food Processors jointly. (ii) Imposed penalty on following trading firms under Rule 25 of Central Excise Rules 2002 readwith Section 11AC of Central Excise Act, 1944 : Sl. Name of the firm Amount of penalty (Rs.) 1. Swastik Entertprises 4,50,000/- 2. Shree Bherav Tools Industries 3,50,000/- 3. Shree Bherav Diamond Impex 50,000/- (iii) Imposed penalty of Rs. 25,00,000/- and Rs....
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....ang Saw Segments & Wire Saw Segments (beads) Pinki Bohra, Prop. (Daughter) 2. Shree Bherav Tools Industries (SBTI) Gang Saw Segments & Wire Saw Segments (beads) Sangeeta Bohra, Prop. (Wife) 3. Shree Bherav Diamond Impex (SBDI) Gang Saw Segments & Wire Saw Segments (beads) Nitesh Bohra, Prop. (Son) 5. The department had issued the show cause notices and confirmed the demands by clubbing the value of clearances of all the manufacturing units, and also by taking the selling price of the trading units as assessable value in respect of the clearances made by the manufacturers through them. 6. The allegations are that four manufacturing units have been floated by Shri Mahendra Bohra to enjoy and remain with exemption limit for SSI units provided under Notification No. 8/2003-CE dated 01/03/2003. 7. Aggrieved by the impugned order, the present appeals have been filed. With the above backgrounds we have heard S/Shri Suhrid Bhatnagar and Arvind Birla, Advocates, learned Counsels for the appellants and Shri M.R. Sharma, learned DR for the Revenue. The arguments advanced on behalf of the appellants are summarized below :- (i) ....
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....onal structure, it cannot be said that all the units are controlled by one person. (vi) lastly, on clubbing of units, if the department contends that all these units are dummy units and are under the control of Shri Mahendra Bohra, the department had not moved forward for revocation of registrations of said dummy units which were issued on the basis of PAN, and issued registration on the basis of PAN of Shree Bherav Diamond Tools Pvt. Ltd. Therefore, existence of registrations based on different PAN even today implies that they are not dummy units and are being run independently. (vii) Therefore, it is submitted that the value of clearances of the five separate manufacturing units cannot be clubbed. As for valuation for sale thorugh trading firms, it is submitted that : (i) Valuation under Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is applicable, if whole or part of the excisable goods are sold by the assessee to or through a person who is related in the manner specified in any of the sub-clauses (ii), (iii) or (iv) of clause (b) of sub-section (3) of Section 4 of the Central Excise Act, 19....
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....espite different identities for all the firms, they were very much connected to each other and the investigation has established that among all the units mutuality of interest exists, hence, he submitted that the distinct nature of the different units was used as an eye-wash to portray its independent nature, whereas the units were inter-dependent and even related in terms of financial control and management. 9. We have heard both sides at length and carefully gone through the appeal records. 10. Out of the 5 manufacturing units, SBDTPL is a private limited company with Shri Mahendra Bohra as well as Smt. Sangita Bohra, wife as the Directors. The other 4 manufacturing units are all proprietary concerns with Shri Mahendra Bohra, his sons or daughter or his wife were the proprietors. During investigation, the following facts have come on record :- (i) manufacturing facilities were installed in all the 5 manufacturing units. None of the manufacturing units can be stated to be in existence only on paper ; (ii) 4 of the manufacturing units (other than SBDTPL) are situated within the same compound which is encircled by a common boundary wall ; (iii) the o....
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....ing units vis-à-vis the production accounted by the units, that there was no correlation between the two figures. This indicated that the production was being recorded in the various manufacturing units arbitrarily by Shri Mahendra Bohra ; (x) Smt. Sangita Bohra in her statement dated 14/09/2013 has admitted that she was not looking after any activities of the firm with whom her name is associated and the affairs of all the firms were looked after by Shri Mahendra Bohra. 11. In the above factual matrix, it is the contention of the appellants that clubbing the value of clearances of all the manufacturing units and adopting the sale price of the trading units as the assessable value is not justified. It is submitted that all the manufacturing as well as trading units have independent existence in the eyes of law in as much as each unit has separate registration under Income Tax, VAT and other Government agencies. The accounts are maintained separately. It is further argued that in the light of the Circular No. 6/92 issued by CBEC under Section 37B, different firms are to be treated as different manufacturers for the purpose of exemption limit and none of the manufa....
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....and management control of all the units by Shri Mahendra Bohra. 15. We are of the view that the facts of the case justifies the removal of the corporate veil in respect of all the units in this case. This reveals that all the units are having dejure separate existence but defacto existence of that of a single unit. We note that SBTPL was the original unit started by Shri Mahendra Bohra and the same is to the defacto unit comprising all the units. 16. In view of the above, we are of the view that the clearances of all the manufacturing units will need to be clubbed and the benefit of duty free clearance under Notification 8/2003 is to be allowed to SBDTPL only. Consequently, we uphold the findings of the Adjudicating Authority regarding clubbing of the value of clearances. 17. Next, we turn to the dispute on valuation. The goods manufactured and accounted under the 5 manufacturing units were entirely cleared through one or other of the three trading units. It has been argued that the trading units are not "related" with any of the manufacturing units in terms of Section 4 (3) (b) of the Central Excise Act, 1944. Consequently, it has been argued that the transaction value is....
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....has not been seriously disputed. Apart from that, the cylinders were brought on lease by MACL from another concern and were sub-leased to the three companies. The cylinders bore the name of MACL. If the three companies had separate standing as contended it could not be explained why they could not get the cylinders directly from the lessors on lease basis and the need for introducing MACL as the lessee and then the three companies becoming sub-lessees. As noted by the Commissioner, entire receipts were paid as lease amount to MACL. Here again, the under-valuation aspect assumes importance. While the supply by MACL to three companies was Rs. 0.50 per unit, the sale price by the three companies was Rs. 5 per unit. It is on record that accounts were kept by common staff and marketing was done under the supervision of a person who belongs to the same group of concerns. The amounts have been collected by an employee of MACL. The so-called Directors of the companies were undisputedly employees of MACL. Almost the entire financial resources were made by MACL. The financial position clearly shows that MACL had more than ordinary interest in the financial arrangements for companies. The sta....