TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 271
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....003 as a partnership firm where Sh. Rajan David is a partner. M/s Alpha Converting Machines Industries obtained sales tax registration on 20.10.2003. The factory of the appellant was searched on 01/02.Feb.2006 and worksheets was prepared taking clearances of all three, namely, M/s Alpha Converting Machines Pvt. Ltd., M/s Alpha Flexible Machinery and M/s Alpha Convert Machines Industries and a demand of Rs. 9,82,487/- was worked out for the year 2004-2005. All three entities claimed to have been operating from same premises. A statement of Sh. Rajan David was recorded on 02.02.2006 wherein he stated that all the 3 units were commonly using the machines installed in the factory premises and that they were not maintaining any separate records for raw materials issued for production. He was looking after all the day to day affairs of the units and he was not receiving any rent either in cash or cheque from the Appellants or M/s Alpha Convert Machines Industry, that electric meter installed in the factory premises was in his own name and the power was being utilized commonly. 3. Statement of various buyers namely, Sh. Rajendrabhai Kikani of M/s Yogeshwar Polymers, SH. Raju Jinralkar of....
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....ad obtained separate registration from state and central sales tax authorities. He pointed out that they had separate Certificates and registration under Companies Act, separate bank accounts and separate registration certificate from Ahmedabad Municipal Corporation. He argued sharing common premises, power or occasional financial transaction is not enough for clubbing the clearance of units. He argued that the financial transactions were duly entered into ledger and books of accounts. He argued that merely borrowing money without interest cannot lead to the conclusion that there was only one unit. He further argued that SCN was not issued to M/s Alpha Flexible Machinery and M/s Alpha Convert Machines Industries. He argued that without issuing a SCN to these so called dummy units, Revenue could not have proceeded with a case. He argued that the statement of Sh. Rajan David was retracted. He argued that no reliance can be placed on the said statement even if the said statement is retracted after 2½ years. 7. He relied on the decision of Hon'ble High Court of Kolkata in case of Diamond Scaffolding Co. 2011 (274) ELT 10 (Cal) to support his assertion that in clubbing of case S....
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....ction between the different entities, he could not explain any. In these circumstances, the Revenue confirmed the demand of excise duty by clubbing. Notification 8/2003-CE dated 01.03.2003 relates to SSI Exemption. The said notification exempts following from Central Excise duty. Table S. No Value of clearances Rate of duty (1) (2) (3) 1. First clearances up to an aggregate value not exceeding one hundred lakh rupees made on or after the 1st day of April in any financial year. Nil 2. All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods. Nil Section 2(v), (vi) and (vii) reads as follows: (v) where a manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each factory; (vi) where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Tabl....
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....te electricity connection and there is no machinery owned by the dummy units. Moreover, there was no evidence in the said case regarding financial flow back whereas in the instant case the appellant has failed to explain the transactions made between the 3 entities. Thus, the facts are significantly different in the instant case. Ld. Counsel has relied on the decision in case of Jifcon Tools Pvt. Ltd. (supra). In the said case, units sought to be clubbed, had separate premises, independent electrical connection, independently financed by MSFC, independent capital machinery supported with by respective purchase invoices, independent labor force at the factory. In the instant case, there is no independent machinery, no separate record of raw materials used, no separate electrical connection and funds, the facts are significantly different. In the case of Jifcon Tools Pvt. Ltd. (supra), the demand was essentially raised on account of common partners and the two entities. Other than that, there was separate premises with separate manufacturing facilities and separate licenses of each entity thus, the facts in the instant case are significantly different. Ld. Counsel has also relied in ....