AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2009 (1) TMI 185
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..... On the basis of intelligence, a vehicle loaded with goods was intercepted by Central Excise Officers on 11-10-1993. The vehicle was found loaded with sugar confectionery etc. The gate pass accompanying the vehicle was not sufficient to cover the quantity loaded in the truck. The Officers therefore visited the factory premises of M/s. Harnik Food Industries from where the goods were loaded in the truck and found that the duty was not debited either in PLA or RG23A Part II and that the gate pass prepared was only for the part quantity. The goods i.e. sugar confectionery valued at Rs.1,14,829.94 were therefore seized along with the truck under a regular panchnama. 3. On 12-10-1993, the factory premises of M/s. Harnik Food Industries and M/s, Harnik Nutrients Private Limited were searched and certain incriminating documents were recovered. Investigations were carried out and statements of persons in-charge of the factory were recorded. The investigation revealed that M/s. Harnik Food Industries and M/s. Harnik Nutrients Private Limited were having their manufacturing premises in the same block i.e. Plot No. A-27, N Block, MIDC, Pimpri, Pune-18. M/s. Harnik Food Industries was havin....
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....ries, M/s. Harnik Nutrients Private Limited and its partners and directors for alleged contravention of various rules specified thereunder and inter alia, demanding duty of Rs. 4,54,435/- in respect of excisable goods manufactured and cleared in the name of M/s. Harnik Nutrients Private Limited during the period from 17-1-1991 to 11-10-1993 even though they were actually manufactured by M/s. Harnik Food Industries. 6. The show cause notice was replied to by M/s. Harnik Food Industries and Mis. Harnik Nutrients Private Limited. In their reply, the basic contention was that both the units have always been treated as separate units since they are located in different premises, have separate machinery and are registered as small scale units separately. It was contended that the two units are assessed to income-tax and sales tax as separate entities. It was contended that they are independent of each other as there was no evidence regarding financial flow back. It was further contended that there was no evidence to establish that M/s. Harnik Nutrients Private Limited was a dummy unit created by M/s. Harnik Food Industries. It was pointed out that the issue regarding the denial of exemp....
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....f the land, building and machinery was set aside. Save for this modification, order dated 24-1-1996 passed by the Commissioner was upheld. The appellants are aggrieved by the above order and, hence, have approached this court. 10. We have heard learned counsel appearing for the appellants. He reiterated the grounds raised in the appeals. He submitted that the CESTAT erred in holding that the clubbing of the clearances of M/s. Harnik Food Industries and M/s. Harnik Nutrients Private Limited is in order. He submitted that the Board's Circular dated 29-5-1992 has been misinterpreted. He submitted that merely because the then partners of M/s. Harnik Food Industries are directors in M/s. Harnik Nutrients Private Limited, it cannot be presumed that there is financial flow back. Learned counsel submitted that the CESTAT failed to appreciate that both the units have independent existence and that they are clearly separate units. He further submitted that the two units are manufacturing altogether different items on separate machineries. The machineries of M/s. Harnik Food Industries cannot manufacture biscuits, soft toffees, etc. and similarly machineries of M/s. Harnik Nutrients Private ....
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....ing activities angle. 12. Learned counsel further submitted that non-filing of declaration by the directors after M/s. Harnik Nutrients Private Limited revived its unit is not fatal. It is at the most a technical lapse. Similarly, the fact that the gate pass in full could not be prepared and the duty could not be debited in the PLA is a mere technical lapse. No dishonest intention can be imputed to the appellants. Learned counsel submitted that the solitary slip found in the goods manufactured by M/s. Harnik Nutrients Private Limited that in case of any complaint M/s. Harnik Food Industries may be contacted would not lead to an adverse inference against the appellants. He further submitted that the appellants were denied the right to cross-examine the witnesses. Thus, there is a breach of principles of natural justice. Learned counsel submitted that the CESTAT has clearly ignored the relevant materials and misconstrued the evidence on record. Learned counsel urged that in the circumstances the impugned judgments be quashed and set aside. Learned counsel for the respondents on the other hand submitted that the impugned judgments are unassailable and deserve to be confirmed. 13. We....