TaxTMI 
TaxTMI 
1989 (2) TMI 118
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....er-operated unit carrying on the work of processing. The Company holds L-4 licence from 1984. The Company receives the goods for processing from various customers and the processing is for giving finishing touch to the fabrics. The cotton fabric is received by the Company for the purpose of bleaching and mercerising and thereafter the bleached and mercerised fabric is processed for stentering, calendering, folding, balling etc. Silver processors is a partnership concern consisting of six partners and they are Rajendra Madanlal Bohra, Parashottam Madanlal Bohra, Ramakant Ghanshamdas Purohit and three members from the family of Padale. This partnership concern was set up for carrying out non-power operated unit at Ichalkaranji and the partnership concern owns a plot and building in the industrial area at Ichalkaranji. There is hardly any doubt that both the Private Limited Company and the partnership firm is managed by the same group. 3. The Central Government in exercise of powers conferred by Rule 8(1) of the Central Excise Rules, 1944 read with sub-section (3) of the Additional Duties of Excise Act, 1957 published notification dated April 20, 1982 exempting cotton fabrics fa....
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....ide are related to each other and have dealings with each other so as to constitute them as a single unit. The anti-evasion unit secured various documents and also recorded the statements of the directors and partners. On the basis of the evidence collected, it was obvious that both the units, that is Swadeshi Deying and Silver Processors are one and the same and the two units are related with each other and manufacture and clear excisable goods without paying duty. The Collector thereupon served show cause notice dated September 20,1985 on the Company and its directors as well as the partnership firm and the partners. The show cause notice alleged that the two units have contravened provisions of Rule 174 read with 173Q(l)(c) of the Central Excise Rules, inasmuch as both the units are engaged in the manufacture of excisable goods by suppressing the fact that they constitute one factory as defined under Section 2(e) of the Act. The show cause notice further charged that during the period from October 1984 to August 1985 the units failed to declare the value of the goods. The show cause notice further claims that M/s. Silver Processors which is claiming to be a non-power operated un....
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....order of the Collector, both the Private Company and the Partnership firm have filed these two petitions. 6. Shri Desai, learned counsel appearing on behalf of the Department raised preliminary objection to the maintainability of the petitions on the ground that there is efficacious alternate remedy available to the petitioners by filing an appeal before the Appellate Tribunal constituted under Section 35-E of the Act. Shri Kantawala, learned counsel appearing on behalf of the petitioners, did not dispute that the right of appeal is available but submitted that the petitioners should not be driven to adopt that remedy after a passage of more than three years. Shri Kantawala submitted that the petitioners would be put to unnecessary expenses if the petitioners are now driven back to file appeal. We made it clear to Shri Kantawala that even though we are inclined to hear the petition on merits, we would not permit the counsel to challenge findings of fact recorded by the Collector. Shri Kantawala stated that the petitioner would raise only question of jurisdiction of the Collector to issue show cause notice and pass the impugned order, and any finding recorded by the Collector wou....
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....he same factory. The modus is, therefore, found out by nominally setting up two separate units one for the purpose of bleaching and mercerising while the other for calendering and stentering. The process of bleaching and mercerising does not bring into existence a new article which is of a marketable value, but the wet fabric which has undergone bleaching and mercerising is required to be further processed by calendering and stentering to make it a final product. It is, therefore, obvious that to secure advantage of both the exemption notifications a method is found out to split up the factory into two units, one run by the private limited company while the other by the partnership firm, but both under the control and care of the same group of persons. 8. The Collector in the impugned order has set out number of factors to conclude that the two units really constitute one composite unit or a factory. The premises in which the two units are set up are adjoining to each other. The premises stand in the name of the partnership firm and is alleged to have been leased to the company in June 1985 for a duration of eleven months. The consideration agreed to be paid was Rs. 400/-per mon....