TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 1023
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....d, Sundarnagar, Jamshedpur (hereinafter referred to as MM) in collusion with M/s Mica Mold (p) Ltd., Sundarnagar, Jamshedpur (hereinafter referred to as MMPL) are indulged in evasion of duty by misusing small scale Exemption Notification No.08/2003-CE as amended as well as clandestine removal of the goods, factory as well as office premises of MM/MMPL, their office premises, residential premises of proprietor of MM/Director of MMPL and residential premises of staff of MM were searched at a time. During search some incriminating documents were recovered. The Indian currency worth Rs. 1.31 crore were also recovered from the office premises of MM & MMPL and the same were detained. Similarly during search operation at residential premises of one of the staff of MM, Indian currency note worth Rs.3.0 crore were recovered and detained. Subsequently, out of detained Indian currency notes, currency notes of Rs. 1,22,56,966/- were seized under Section 110 of the Customs Act read with Section 12 of the Central Excise Act, 1944. 3. It is the further case of the Revenue that on scrutiny of seized documents, it was found that MM have wrongly availed SSI exemption under Notification No.08/2003-C....
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.... the aforesaid investigation and the documents available on records and the statement recorded u/s 14 of the CEA, a show-Cause Notice was issued to the Respondent Assessee by the Department. 8. The case was decided against the Assessee and the adjudicating authority Vide O-I-O No.06-09/ Commissioner/2011 dated 31.03.2011 / 13.04.2011 confirmed the amount of Rs.1,42,35,345/-, Rs.40,39,548/-, Rs.12,22,888/- and Rs.6,84,451/- along with interest and penalty. 9. Being aggrieved by the aforesaid O-I-O dated 31.03.2011/13.04.2011, the Assessee/Respondent filed an Appeal before the learned CESTAT, Kolkata which was registered as Excise Appeal No. 648-654 of 2011. 10. The learned CESTAT, Kolkata vide Order dated 22.08.17 remanded the matter after setting aside the Penalty. 11. Against the aforesaid order of CESTAT, the present appeal has been filed. 12. It is evident from the factual aspect that the original authority altogether has formulated six issues i.e., - (1) Whether value of clearances of MM and MMPL are to be clubbed for determining Central Excise duty payable as MMPL? (2) Whether duty of excise on goods valued at Rs. 40,56,508 are recoverable? (3) Whether inspection ch....
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....olutely under Section 121 of the Customs Act, 1962 applicable to Central Excise by virtue of provision contained in Section 12 of the Central Excise Act, 1944. (4) In respect of all four show cause notices, I impose penalty on M/s Mica Mold Pvt. Ltd., Jamshedpur, Sri Arun Agrawal, Proprietor of M/s Mica Mold, Jamshedpur & Director of M/s Mica Mold Pvt. Ltd., Jamshedpur as well as on Sri Harsh Agrawal under rule 26 of the Central Excise Rules, 2002 as under:- (a) M/s Mica Mold Pvt. Ltd., Jamshedpur Rs. 50,00,000/- (Rupees fifty lakh) only. (b) Sri Arun Agrawal, Proprietor of M/s Mica Mold and Director of M/s Mica Mold Pvt. Ltd. - Rs. 50,00,000/- only. (c) Sri Harsh Agrawal, Director of M/s Mica Mold Pvt. Ltd., Jamshedpur - Rs.20,00,000/- (Rupees twenty lakh) only." 14. The assessee, being aggrieved with the aforesaid order, has preferred appeal before the Tribunal being Excise Appeal No.648-654 of 2011. 15. The Issue Nos. 1, 2, 3 and 4 have been decided in favour of the assesse whereas the Issue No.5 has been remanded for fresh adjudication. 16. The Revenue, being aggrieved with the order passed by the learned Tribunal with respect to the issue having been decided in favo....
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.... The Tribunal has come to the conclusion that only because the Directors of the Private Limited Company are the sons of the Proprietor of the firm, does not mean that they are the same business entities, especially when in the subsequent assessment year the Department has accepted these facts. 22. The ground, therefore, has been raised that without taking into consideration the fact finding arrived at by the original authority on appreciation of the relevant documents, coming to the conclusion by assigning the reason that Directors of the Private Limited Company are the sons of the Proprietor of the firm, does not mean that they are the same business entities. 23. It has been contended that it is not only that Directors of the Private Limited Company are the sons of the Proprietor of the firm, rather, even the fact about the mutuality of interest between the two units has been found to be established on consideration of the relevant documents by the original authority wherein the consideration has been given with respect to the selling of the goods to the same customer as was found to be there from the documents placed as Annexure-1. 24. Further, MM and MMPL are recognized by th....
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....nt from the factual aspect, which is not in dispute, that altogether six issues were there but this appeal has been preferred with respect to the Issue No.1 which has been decided against the assessee and which, on challenge, has been reversed by the appellate forum, the Tribunal. 34. The learned counsel appearing for the Revenue has emphatically argued by referring the consideration made by the Assessing Officer as has been taken note in paragraph 10.1.2 of the order passed by the original authority. This Court, in order to appreciate the sane, needs to refer herein the finding so recorded at paragraph 10.1.2 passed by the original authority, which reads hereunder as : - "10.1.2 The two units manufacture similar goods, selling to the same customer, i.e. Indian Railways. As revealed from documents placed as Annexure-1 of this Order, both MM & MMPL are recognized by their customer i.e Indian Railways (Eastern Railway & Southern Railways) as one and same vendor, being code 68457. They are operating from one and same office. In course of search, most documents of MM were found in the declared office of MMPL. Stock register of both MM and MMPL were found common. The stock register o....
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....firm does not mean that they are the same business entities. Therefore, the learned Tribunal, while considering the aforesaid issue, has only gone into the issue of entities which led the learned Tribunal to come to the conclusion that since both the units are having distinct and separate entity being the Proprietary concern and Private Limited Company and, therefore, the finding which has been recorded by the original authority cannot be said to be just and proper. 40. But, this Court is of the view that when the consideration has been given by the original authority by taking into consideration the various documents, i.e., Stock Register for Brush Holder etc. and hence, it was incumbent upon the appellate authority to re-appreciate the said documents for the purpose of coming to the conclusion and not only by going through the identity of both the firms, i.e., one being the Proprietary concern and another a Private Limited Company. 41. The issue of clubbing together for the purpose of getting exemption requires consideration on the basis of the transaction of the business which cannot be assessed only on the basis of the fact that one unit is a Proprietary concern and another i....