TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 58
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..... The appellant M/s Pap Flon Engineering Co Pvt Ltd has deposited amount of Rs. 20,93,623/- towards interest and reduced penalty Rs. 16,58,380/- @ 25 % of duty amounting, within 30 days from Order-in-Original dated 13-05-2011. Hence, these 3 Appellants are before us in appeals against confirmation of duty demands and penalties imposed on them. 1.1 These three Appeals can be disposed of considering the following questions: - (i) Whether M/s Pap-Flon Enterprise is an existing manufacturer eligible for excise duty exemption claimed under SSI Notification No. 8/2003-CE or otherwise. (ii) Whether Show Cause Notice to M/s Pap-Flon Enterprise proposing for denial of SSI exemption claimed and proposing clubbing of their clearances with M/s Pap-Flon Engineering Co.Pvt. Ltd was required to be issued or otherwise (iii) Whether demands in Show Cause Notice dt. 18-10-2010 was issued within permitted time limitation for period from 1-4-2005 to 30-09-2010 or otherwise 02. Brief facts of the case are that M/s Pap-Flon Engineering Co Pvt Ltd is a Company engaged in manufacture of Teflon Lined Equipmentand Components since year 1985; that late Shri Prabhudas Chhaganlal Parmar was the founder....
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....submitted that duty demand after clubbing clearance of M/s Pap-Flon Enterprise with M/s Pap-Flon Engineering Co Pvt Ltd are not justified/sustainable in the facts of this case. The Submissions made on behalf of Appellants in this case are summarized as under:- * M/s Pap-Flon Engineering Co Pvt Ltd and other unit M/s Pap-Flon Enterprise are existing as manufacturers and clubbing clearances of these two units is not permitted in the settled law. * M/s Pap Flon Enterprise was not issued Show Cause Notice for denial of SSI exemption claimed and proposing clubbing of their clearances with M/s Pap-Flon Engineering Co Pvt Ltd. * Duty Demand is not sustainable on time limitation. * Benefit of "Cum-duty-price" not allowed while computing duty demand. * Benefit of Cenvat Credit of duty paid on inputs by M/s Pap-Flon Enterprise not allowed. * Unjustified, unwarranted penalties imposed on all the Appellants. 4. Shri Rajesh P. Parekh, Learned Superintendent (Authorised Representative) appearing on behalf of the revenue reiterates the findings of Adjudicating Authority and submitted that without "Ram Extruder Machines" M/s Pap Flon Enterprise could not have manufactured the goods cl....
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....m thickness of 3 MM and also for processing Rods with Dia 6 MM to 60 MM, various sizes of PTFE Pipes, Dip Pipes and Elbows etc and that the goods produced on the said "Ram Extruders Machines" can also be further processed with the other machines like Hydraulic press Machines, Electric Ovens, and lathe Machines to produce other goods. The appellants have also submitted that these machines are also not mandatorily required for manufacture of all the goods cleared by M/s Pap Flon Enterprise and the goods cleared by M/s Pap-Flon Engineering Co Pvt Ltd. However, we also find that all the goods cleared by M/s Pap Flon Enterprise were not all goods as shown in Certificate by Chartered Engineer. Use of "Ram Extruders Machines" found installed in M/s Pap-Flon Engineering Co Pvt Ltd, does not conclusively prove fact that all the goods cleared by said M/s Pap-Flon Enterprise were actually manufactured in factory of M/s Pap-Flon Engineering Co Pvt Ltd. The machineries found in M/s Pap-Flon Engineering Co. Pvt. Ltd are reflected in Para 3.2 of SCN and the Machineries found installed in the factory of M/s Pap-Flon Enterprise are reflected in Para 4.1 of Show Cause Notice dt. 18-10-2010. Except "....
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....fore, less consumption of electricity cannot become the reason for confirmation of duty demand on clubbing clearances of goods made by two such units. Consumption of less electricity by M/s Pap Flon Enterprise is explained by Appellants by showing independent purchase of inputs by Pap Flon Enterprise and getting job work done by others including from M/s Pap Flon Engineering Co. Factories of both, Appellant M/s Pap-Flon Engineering Co Pvt Ltd and M/s Pap Flon Enterprise were also searched on 10-08-2010 by two separate & independent Panchanama drawn, but, there was no seizure of any finished goods or inputs in any of said two factory premises. This fact establishes that there was no variation in the stock of finished goods or inputs at the time of such search and investigation. M/s Pap-Flon Engineering Co Pvt Ltdwas established in 1985as manufacturer of Teflon Lined Equipment &Components, availed SSI Exemption, obtained Central Excise Registration in year 2003 and filed statutory Returns. M/s Pap-Flon Enterprise was set up in year 1993-94 for manufacturing similar goods of Teflon Lined Equipment &Componentsas per List-I as reflected on page No. 35 to 51 of synopsis,M/s Pap-Flon Ente....
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....nd registered under GST w.e.f. 01-07-2017 and continued as the "Manufacturer". Copies of Excise and GST Registration are on record as List-II on page Nos 58 to 61 in synopsis filed.Charges paid by M/s Pap Flon Enterprise for Job Work and labour for Machining, Drilling Grinding etc are reflected in List-III atpage Nos 62 to 75 in synopsis. Details of Inputs purchased by M/s Pap Flon Enterprise is in List-IV atpage Nos. 76 to 83 in synopsis.Fixed assets and machineries installed in M/s Pap-Flon enterprise has substantial value in Balance Sheets in List-VI at page Nos 91 to 105 in synopsis. Revenue was also required to prove that all goods by M/s Pap-Flon Enterprise, were in fact manufactured in factory of M/s Pap Flon Engineering Co Pvt Ltd. However, allegation is only on assumption and presumption, which is not proved conclusively by the Revenue in the facts of this case. Separate and Independent identity of M/s Pap-Flon Enterprises is proved and independent existence is proved as manufacturer. Adjudicating authority's findings are not sustainable in absence of independent evidence that all the goods cleared by M/s Pap Flon Enterprise are manufactured in M/s Pap Flon Engineering Co ....
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....s relied upon decision of Hon'ble Apex Court in GAJANAN FABRICS DISTRIBUTORS - 1997(92) ELT-451(SC)to assert that demand can only be confirmed against assessee who is liable and it cannot be confirmed against dummy units.Hence, in the said case of ALPHA CONVERTING MACHINES PVT. LTD (supra), all clearances were rightly clubbed to arrive at aggregate value of SSI exemption available under Notification. In the facts of this case, we find that M/s Pap Flon Enterprise is an existing manufacturer eligible to avail SSI Exemption of Notification No. 8/2003-CE, having separate factory, machinery, PAN, Sales Tax, IEC, Professional Tax, ESIC Numbers, separate Electricity Meters and separate Bank Accounts. Therefore, this Tribunal's decision in the case of Alpha Converting Machines Pvt. Ltd (supra) is on different facts of only dummy units and hence it is not applicable in the facts of this case. The ratio of decisions is that dummy units created to avail ineligible SSI benefits may not get ineligible benefits of SSI Notification, but benefits to existing units can not be denied the SSI Exemption, if available otherwise. Therefore, clubbing of clearances of M/s Pap Flon Enterprise, who is exis....
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....ed. Consequently, this question is answered in favour of the Appellants. 5.3 On the third question Whether Demand Show Cause Notice dated 18-10-2010 was issued within permitted time limitation covering period from 1-4-2005 to 30-9-2010 or otherwise, appellants have submitted that Show Cause Notice is also not sustainable on time limitation as pre-requisite conditions and the ingredients like fraud, collusion,wilfulmis-statement or suppression of facts, with intent to evade payment of duty, for invoking extended period are not existing in the facts of this case, extended period for demand of duty is not available in terms of section 11A of Central Excise Act 1944. It is submitted that M/s Pap Flon Enterprise has filed annual statutory declarations and intimated department of its manufacturing activity and clearance of goods since 1993-94. Declaration contained grounds of SSI exemption of Notification No. 8/2003-CE claimed. M/s Pap Flon Enterprise has filed such SSI declarations from 1993-94 onwards from time to time declaring goods manufactured and cleared availing the SSI Exemption. We have perused such declarations filed on 25-07-2005, 29-11-2006 and 25-01-2008, which are acknowl....
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....ngineering Co Pvt Ltd, after clubbing clearances of M/s Pap Flon Enterprise and excluding such alleged clearances of M/s Pap Flon Enterprise, appropriate duty is paid by M/s Pap Flon Engineering Co Pvt Ltd. There is no justification for denial of SSI exemption under Notification No. 8/2003-CE to M/s Pap Flon Enterprise in this case. 06. Thus, in view of above observations and findings on the facts, we hold that (1) M/s Pap-Flon Enterprise is an existing manufacturer who is eligible for excise duty exemption claimed under SSI Notification No. 8/2003-CE and clubbing of clearances of M/s Pap Flon Enterprise with clearances of M/s Pap Flon Engineering Co Pvt Ltd in this case are not sustained. (2) Show Cause Notice to M/s Pap-Flon Enterprise for denial of SSI exemption and for clubbing of clearances with M/s Pap-Flon Engineering Co Pvt Ltd was required to be issued and having not done so, proceedings deserves to be set aside (3) Show Cause Notice dated 18-10-2010 covering period from 01-04-2005 to 30-09-2010 invoking extended period in this case also deserves to be set aside on time limitation. Consequently, demands of duty confirmed with interest and equal penalty against M/s Pap-Flo....