TaxTMI 
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2025 (10) TMI 176
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....NESHA, MEMBER (JUDICIAL) AND MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) For the Appellants : Mr. S. Jaikumar, Advocate (Sl.Nos. 1-6 and 26-30, Mr. Hari Radhakrishnan, Advocate (Sl. Nos. 7-25) For the Respondent : Ms. Anandalakshmi Ganeshram, Authorised Representative ORDER Per Mr. VASA SESHAGIRI RAO Sri Poovathal Polymers (SPP for short), and various other appellants listed above, are in appeal before us, against the Order-In-Original No.MDU-CEX-COM-09-2023 dated 05-04-2023 (Originally numbered as MDU-CEX-COM03-2023 dated 05-03-2023 and amended vide Corrigendum dated 31-03-2023), challenging the confirmation of the demand of differential duty, under Section 11A of the Central Excise Act (CEA for short), interest under Section 11AB of CEA and penalty under 11AC of CEA, and with respect to all other appellants listed above, against the imposition of penalties under Rule 26 of Central Excise Rules (CER for short). 1.1 The issue involved in this case is the clubbing of value of clearances among SPP and 11 other units, who were engaged in the manufacture and clearance of excisable goods, namely, polybags falling under Chapter Heading 3923 of Central Excise Tari....
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....the period from April 2015 to June 2017, the counsel would submit that, it is a well settled legal position that, clandestine production cannot be alleged or confirmed merely based on the electricity consumption, as the Central Excise duty is on the manufacture of excisable goods and not based on any mathematical calculations. It was also argued that, whereas the electricity consumption could be one metric in the manufacturing process, there are many more crucial and critical factors to establish the manufacturing trial namely, purchase of raw material, manpower, production records, packing and transport, sale of finished goods and realisation of sale proceeds. In the instant case, the adjudicating authority has not attempted to establish any of the essential elements of manufacture to conclude clandestine production and clearance thereof, but has resorted only to power consumption to confirm differential duty. 3.5 It was further argued that, the adjudicating authority has solely based on the power consumption by SPP during the post-GST era and adopted the same for pre-GST era. While doing so, he has ignored the vital fact that, SPP were originally engaged in the manufacture of 2 ....
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....ying SSI Exemption on the following grounds, namely, i. Commonality of Infrastructure ii. Common workforce iii. Mutuality of interest + iv. Interdependence between units and, v. Financial flowback 4.1.0 With respect to commonality of infrastructure, it was submitted that, it remains undisputed that both SPP as well as DUs existed and operated in separate and independent premises. That being so, it is only the allegation of the department that, rent has not been properly paid by the DUs to the respective premises owners in respect of the infrastructure leased out. 4.1.1 In this connection, various submissions made by SPP and DUs, are as follows that: - a) Each unit is having separate land and building either in their own name or operated under a valid lease deed b )Each unit is geographically located in different places or having separate boundary c) Each unit is having separate machineries on their own d) Each unit is having separate Electricity connection in their own name e) Each unit purchased raw materials on their own account f) Thus, each unit is having separate manufacturing premises g) Each unit is having separate registration under Fac....
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....at, wherever the common resources were utilized, they were compensated from respective entities, which goes to prove the arm's length transactions. 4.2.1 The allegation that some of the units owned or partnered by the relatives of Shri. M. Bommanasamy, by no stretch of imagination can be construed to be a reason for clubbing of value of clearances. At the most, Shri. M. Bommanasamy can only be alleged for communal development. 4.2.2 In this regard, reliance is placed on the following decisions: - a) Renu Tandon reported in 1993 (66) E.L.T. 375 (Rajasthan High Court) b) Sushil Chemicals - 2008 (230) E.L.T. 117 (CESTAT, Bangalore) 4.3.0 With respect to the allegation regarding mutuality of interest, the counsels would submit that, by the very words of this expression, to allege mutuality of interest, there shall be 'mutuality'. 'Mutuality' by letter and spirit, is a two-way lane, where both the ends of the transaction should have interest and reap benefits. Applying to the case on hand, if mutuality of interest has to be alleged between SPP and others, the basic and fundamental requirement is to establish that there existed a vested interest between SPP and the other DUs, wh....
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....ugh their other legitimate income sources which have been reflected in their profit & loss account and balance sheets as evident from the Income Tax returns filed. DETAILS OF ALL THE UNITS Company Address Type Of Firm/Constitution Establishment Year Land Building Rental / Lease Details Machinery Electricity Source Of Investment Sri Poovathal Polymers R.S.1196/2C, 1197/2C, 2B Palani Road, Vedasandur. TIN:33275261223 Partnership: M. Bommanasa my B. Poovathal B. Karthik 01.04. 1994 Own Own NA Own 05-274001-233 Statement of A/cs Flint Paper & Plastic Industry No.1/155, Flint Nagar, Ottanchathiram Road, Vedasandur, Dindigul- 624 710 TIN:33775260754 Partnership: M. Bommanasamy B. Poovathal 01.04.1992 Own Own NA Own 05-274001-217 Statement of A/cs Karthik Polymers (later Karthik Traders) 2/18, Palani Road, Vedasandur, Dindigul- 624 710 TIN:33095263165 Proprietorship: M. Bommanasamy 06.01. 2014 Rent Rent Rs. 10,000/-p.m Own 05-274001-787 Statement of A/cs Aathisangara Polymers Ayyanar Nagar, Pa....
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....t of A/c Sri Bommiyan Polymers (previously Shanmuga) lease of SPP R.S.1196/2C, 1197/ 2C,2B Palani Road, Vedasandur. Dindigul - 624 710 TIN:33306252401 Proprietorship: Kalaikumar 21.04. 2016 Lease Lease Rs.15,000/- p.m Leas e 05-274- 001-233 Statement of A/c 4.6.0 With the respect to another major allegation of the Department to conclude that all the units are DUs of SPP is based on a finding that, there existed a financial flowback between DUs and SPP, post the purchase, the appellant submitted the following table to establish that the entire alleged financial transaction is only in nature of loans which are subsequently paid back to the respective vendors. Repayment of Loan SI. No. Firm Transferred from Transferred to Date of transfer Amount Date of repayment Amount Interest 1 MBS Polymers V. Sivakumar SPP 11.12.2018 450,000 17.06.2019 to 30.07.2020 30.07.2020 3,64,500 1,49,104 63,604 Karthik traders 26.03.2019 470,000 30.07.2020 545,200 75,200 S. Lingamuthu SPP 10.12.2018 450,000 15.06.2019 to 30.07.2020 30.07.2....
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....sp;28.09.2020 5,00,000 2,908 12,00,000 402,908 B. Vinodkumar SPP 10.12.2018 400,000 June 2019 to July 2020; Interest 400,000 56,716 5 Mookambika Polymers A. Senthil Kumar Aathisangaraa Polymers 22.03.2019 1,335,000 June 2020 to October 2022; 735,000 Nil 4.6.1 Thus, the Ld. Counsel would submit that, all the financial transactions are within the framework of law and the allegation and confirmation of the demand on this count needs to be set aside. 4.6.2 In this regard, reliance is placed on the decision of the CESTAT, Bangalore in the case of M/s. Agarwal Rubber Pvt Ltd. reported in 2009 (238) E.L.T. 336 (CESTAT, Bangalore). 4.7.0 Apart from the above, it was also argued that, out of the 11 DUs who are sought to be clubbed with SPP, M/s. Flint Paper and Plastic Industry (FPP) is also one. It is a fact on record that SPP came into existence in the year 1994, whereas FPP started its manufacturing operations in the year 1992 itself. It would be cur....
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....fied agency as "Examiner of Electronic Evidence" under Section 79A of the Information Technology Act, 2000, read with Section 45A of the Indian Evidence Act, 1872. 7.2 For ease of reference, the relevant provisions are reproduced below: - "Section 45A - Opinion of Examiner of Electronic Evidence When in a proceeding, the court has to form an opinion on any matter relating to any information transmitted or stored in any computer resource or any other electronic or digital form, the opinion of the Examiner of Electronic Evidence referred to in section 79A of the Information Technology Act, 2000 (21 of 2000), is a relevant fact. Explanation.-- For the purposes of this section, an Examiner of Electronic Evidence shall be an expert. Section 79A of the Information Technology Act, 2000 The Central Government may, for the purposes of providing expert opinion on electronic form evidence before any court or other authority specify, by notification in the Official Gazette, any Department, body or agency of the Central Government or a State Government as an Examiner of Electronic Evidence. Explanation: For the purposes of this section, "electronic form evidence" means any ....
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....ons post intimation of his intent to rely on such materials duly stating the reasons why he intends to arrive at the said opinion. We are therefore of the considered view that the adjudicating authority has grossly erred in placing reliance on the statements recorded under Section 14 without following the mandate of Section 9D of the CEA. The reliance placed by the adjudicating authority on all these untested statements cannot sustain. This has rendered the case of clandestine removal made against the appellants wholly unsustainable on this ground alone. 71. The only remaining question of law that arises for our consideration is whether the electronic evidence collected during investigation in this case, is admissible given the absence of certificate issued under Section 36B. 72. We observe that a three judge bench of the Honourable Apex Court has rendered a judgement on 28th January 2025 in Criminal Appeal No. 879 of 2019 in the case of Chandrabhan Sudam Sanap v The State of Maharashtra, reported in 2025 INSC 116, wherein the Honourable Apex Court after analysing the relevant judgements pertaining to Section 65-B of the Indian Evidence Act, and the failure to produce the Sec....
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.... (a) by a combination of computers operating over that period; or (b) by different computers operating in succession over that period; or (c) by different combinations of computers operating in succession over that period; or (d) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combinations of computers, all the computers used for that purpose during that period shall be treated for the purposes of this section as constituting a single computer; and references in this section to a computer shall be construed accordingly. (4) In any proceedings where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say, -- (a) identifying the electronic record containing the statement and describing the manner in which it was produced; (b) giving such particulars of any device involved in the production of that electronic record as may be appropriate for the purpose of showing that the electronic record was produced by a computer; (c)dealing with any of the matters to which the conditions mentioned in subsection (2....
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....o observed at para 276. Hence, printouts taken from the computers/servers by mechanical process and certified by a responsible official of the service-providing company can be led in evidence through a witness who can identify the signatures of the certifying officer or otherwise speak of the facts based on his personal knowledge. Irrespective of the compliance with the requirements of Section 65-B, which is a provision dealing with admissibility of electronic records, there is no bar to adducing secondary evidence under the other provisions of the Evidence Act, namely, Sections 63 and 65. It may be that the certificate containing the details in subsection (4) of Section 65-B is not filed in the instant case, but that does not mean that secondary evidence cannot be given even if the law permits such evidence to be given in the circumstances mentioned in the relevant provisions, namely, Sections 63 and 65." 37. However, on 18.09.2014, in the case of Anvar P.V. v. P.K. Basheer & Ors., (2014) 10 SCC 473, Navjot Sandhu (supra) was overruled. In Anvar P.V. (supra), it was held as under: "22. The evidence relating to electronic record, as noted hereinbefore, being a special provisi....
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.... admissibility of documents in evidence may be classified into two classes: (i) an objection that the document which is sought to be proved is *itself inadmissible* [ The matter between two asterisks has been emphasised in original] in evidence; and (ii) where the objection does not dispute the admissibility of the document in evidence but is directed towards the * mode of proof *[ The matter between two asterisks has been emphasised in original.] alleging the same to be irregular or insufficient. In the first case, merely because a document has been marked as "an exhibit", an objection as to its admissibility is not excluded and is available to be raised even at a later stage or even in appeal or revision. In the latter case, the objection should be taken when the evidence is tendered and once the document has been admitted in evidence and marked as an exhibit, the objection that it should not have been admitted in evidence or that the mode adopted for proving the document is irregular cannot be allowed to be raised at any stage subsequent to the marking of the document as an exhibit. The later proposition is a rule of fair play. *The crucial test is whether an objection, if taken....
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....Rs which are a form of electronic record are not inherently admissible in evidence. The objection is that they were marked before the trial court without a certificate as required by Section 65-B(4). It is clear from the judgments referred to supra that an objection relating to the mode or method of proof has to be raised at the time of marking of the document as an exhibit and not later. The crucial test, as affirmed by this Court, is whether the defect could have been cured at the stage of marking the document. Applying this test to the present case, if an objection was taken to the CDRs being marked without a certificate, the Court could have given the prosecution an opportunity to rectify the deficiency. It is also clear from the above judgments that objections regarding admissibility of documents which are per se inadmissible can be taken even at the appellate stage. Admissibility of a document which is inherently inadmissible is an issue which can be taken up at the appellate stage because it is a fundamental issue. The mode or method of proof is procedural and objections, if not taken at the trial, cannot be permitted at the appellate stage. If the objections to the mode of ....
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....C (Cri) 860 : (2018) 1 SCC (Cri) 865] that such certificate cannot be secured by persons who are not in possession of an electronic device is wholly incorrect. An application can always be made to a Judge for production of such a certificate from the requisite person under Section 65-B(4) in cases in which such person refuses to give it. 46. Resultantly, the judgment dated 3-4-2018 of a Division Bench of this Court reported as Shafhi Mohd. v. State of H.P. [Shafhi Mohd. v. State of H.P., (2018) 5 SCC 311 : (2018) 2 SCC (Cri) 704], in following the law incorrectly laid down in Shafhi Mohammad [Shafhi Mohammad v. State of H.P., (2018) 2 SCC 801 : (2018) 2 SCC 807 : (2018) 2 SCC (Civ) 346 : (2018) 2 SCC (Civ) 351 : (2018) 1 SCC (Cri) 860 : (2018) 1 SCC (Cri) 865], must also be, and is hereby, overruled. 47. However, a caveat must be entered here. The facts of the present case show that despite all efforts made by the respondents, both through the High Court and otherwise, to get the requisite certificate under Section 65-B(4) of the Evidence Act from the authorities concerned, yet the authorities concerned wilfully refused, on some pretext or the other, to give such certificate.....
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....ng evidence to be filed at a later stage should not result in serious or irreversible prejudice to the accused. A balancing exercise in respect of the rights of parties has to be carried out by the court, in examining any application by the prosecution under Sections 91 or 311 Cr.PC or Section 165 of the Evidence Act. Depending on the facts of each case, and the court exercising discretion after seeing that the accused is not prejudiced by want of a fair trial, the court may in appropriate cases allow the prosecution to produce such certificate at a later point in time. If it is the accused who desires to produce the requisite certificate as part of his defence, this again will depend upon the justice of the case - discretion to be exercised by the court in accordance with law. 61. We may reiterate, therefore, that the certificate required under Section 65B(4) is a condition precedent to the admissibility of evidence by way of electronic record, as correctly held in Anvar P.V. [Anvar P.V. v. P.K. Basheer, (2014) 10 SCC 473 : (2015) 1 SCC (Civ) 27 : (2015) 1 SCC (Cri) 24 : (2015) 1 SCC (L&S) 108], and incorrectly "clarified" in Shafhi Mohammad [Shafhi Mohammad v. State of H.P., (....
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....) 1 SCC (Civ) 27 : (2015) 1 SCC (Cri) 24 : (2015) 1 SCC (L&S) 108] which reads as "... if an electronic record as such is used as primary evidence under Section 62 of the Evidence Act ..." is thus clarified; it is to be read without the words "under Section 62 of the Evidence Act,...". With this clarification, the law stated in para 24 of Anvar P.V. [Anvar P.V. v. P.K. Basheer, (2014) 10 SCC 473 : (2015) 1 SCC (Civ) 27 : (2015) 1 SCC (Cri) 24 : (2015) 1 SCC (L&S) 108] does not need to be revisited." (Emphasis supplied) 49. This judgment has put the matter beyond controversy. In view of the above, there is no manner of doubt that certificate under Section 65-B(4) is a condition precedent to the admissibility of evidence by way of electronic record and further it is clear that the Court has also held Anvar P.V. (supra) to be the correct position of law." (emphasis supplied) 73. Thus, the aforesaid most recent judgement of the Honourable Supreme Court case, after analysing all the relevant previous judgements, has reiterated beyond the pale of any doubt that certificate under Section 65-B (4) [pari materia with Section 36B(4)], is a condition precedent to the admissibility....
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....perating properly or, if not, then any respect in which it was not operating properly or was out of operation during that part of that period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduces or is derived from information supplied to the computer in the ordinary course of the said activities. (3) Where over any period, the function of storing or processing information for the purposes of any activities regularly carried on over that period as mentioned in clause (a) of sub-section (2) was regularly performed by computers, whether - (a) by a combination of computers operating over that period; or (b) by different computers operating in succession over that period; or (c) by different combinations of computers operating in succession over that period; or (c) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combination of computers, all the computers used for that purpose during that period shall be treated for the purposes of this section as constituting a single computer; and refer....
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.... follows: "Document. - "Document" means any matter expressed or described upon any substance by means of letter, figures or marks, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter." 17. "Evidence" in section 3 of the Evidence Act is defined as follows: "Evidence." -- "Evidence" means and includes - (1) all statements which the Court permits or requires to be made before it by witnesses, in relation to matters of fact under inquiry; Such statements are called oral evidence; (2) all documents including electronic records produced for the inspection of the Court; such documents are called documentary evidence." 18. Section 36B of the Central Excise Act deals with cases where any document is required to be produced as an evidence in proceedings under the Central Excise Act and the Rules framed thereunder. Such certificate should be signed by a person occupying a responsible position in relation to the operation of the device in question or the management of the relevant activities. In such a case it shall be evidence of any matter which is stated therein. It specifically mandates production of a ce....
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....t, compact disc, video compact disc or pen drive, pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence; (iv) Only if the electronic record is duly produced in terms of section 65B of the Evidence Act, that the question of its genuineness would arise. The Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if the requirements of section 65B of the Evidence Act is not complied with; (v) An electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements of section 65B of the Evidence Act has satisfied; and (vi) This would not apply in a case where the appellant adduces primary evidence by making available in evidence the electronic records. The Tribunal thereafter goes on to notice the decisions of the Tribunal in Agarvanshi Aluminum Ltd vs. Commissioner of Customs (I), Nhava Sheva 2014 (299) ELT 83 (Tri.-Mum), Popular Paints and Chemicals vs. Commissioner of Central Excise and Customs, Raipur and Global Extrusion Private Limited and Ors. Vs. Commissioner of Central Excise & ST, Rajkot and then held as under: 26. The aforesaid decisions....
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.... April 2015 to June 2017, the same has been challenged by the appellants on various factual metrics, as well as, settled legal position. It remains undisputed that the basis for the estimate of excess production for the disputed period (April 2015 - June 2017) was based on the electricity consumption of SPP during 2018 - 2019, a period posterior to the disputed period. The appellants have advanced their arguments that, the learned adjudicating authority has not considered any of their submissions with respect to the various factors and reasons attributable to the difference in power consumption including the difference in usage of virgin materials vis-à-vis reprocessed materials between the disputed period (April 2015 - June 2017) and the period considered as the basis, namely, 2018 - 2019. In other words, it is the argument of the appellant that, they were using reprocessed materials which required higher power consumption during the disputed period, whereas, usage of reprocessed materials were progressively banned and they started using only virgin materials in 2018-2019, which consumed lesser power compared to the usage of reprocessed materials. We find that this importan....
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....ome figure between 555 to 1046 units as norm as per Dr. Batra's report? 20.2 We note that no experiments have been conducted in the factories of the appellants for devising the consumption norms of electricity for producing one MT of steel ingots. It is the basic philosophy in the taxation matters that no tax can be levied on the basis of estimation. In this case, there is added problem. Estimation of production fluctuates widly depending upon the fact as to which report is adopted. Tax is on manufacture and it is to be proved beyond doubt that the goods have been actually manufactured, which are leviable to excise duty. Unfortunately, no positive evidence is coming on record to that effect. Article 265 of the Constitution of India says that no tax shall be levied or collected except by authority of law. Unless the manufacture of the steel ingots is proved to the hilt by authentic, reliable and credible evidence, duty cannot be demanded on the basis of hypothesis and theoretical calculations, without taking into consideration the ground realities of the functioning of the factories. High consumption of electricity by itself cannot be the ground to infer that the factories en....
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....(90) E.L.T. 343 (T) (viii) M/s. Madhu Products v. CCE, Hyderabad - 1999 (111) E.L.T. 197 (T). 22. The clandestine manufacture and removal of excisable goods is to be proved by tangible, direct, affirmative and incontrovertible evidences relating to: (i) Receipt of raw material inside the factory premises, and non-accountal thereof in the statutory records; (ii) Utilization of such raw material for clandestine manufacture of finished goods; (iii) Manufacture of finished goods with reference to installed capacity, consumption of electricity, labour employed and payment made to them, packing material used, records of security officers, discrepancy in the stock of raw materials and final products; (iv) Clandestine removal of goods with reference to entry of vehicle/truck in the factory premises, loading of goods therein, security gate records, transporters' documents, such as L.Rs, statements of lorry drivers, entries at different check posts, forms of the Commercial Tax Department and the receipt by the consignees; (v) Amount received from the consignees, statement of the consignees, receipts of sale proceeds by the consignor and its disposal. In the instant....
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....f law and is liable to be set aside. It is natural that making polybags from reprocessed materials results in more electricity consumption. 8.0 Further, the allegation of clandestine manufacture and clearance has to be established through a chain of events constituting manufacturing process and tangible evidence of clandestine manufacture and clearance and not merely based on inferences, estimates or assumptions. 8.1 We find that in cases where clandestine manufacture and clearance thereof are alleged, the investigation is required to prove the same to a reasonable extent and cannot be an estimation however mathematical it may be. Further, though not exhaustive but illustrative, certain basic standard of proof for excess raw materials, unaccounted finished products, sales which are not brought to the books, realisation of sale proceeds, proof of transportation of goods, etc., should form the basis. If the department is able to substantially prove most of the above standard of proof, then power consumption can aid them to conclude clandestine production and clearance. On the other hand, in the instant case, it is seen that no effective attempt has been made by th....
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....AT and CST registration j) Each unit is having separate PAN Number k)E ach unit is having separate SSI certificate l) Each unit is having separate Bank Account m) Each unit is having separate labour n) Separate ESI /EPF registration, wherever required. 9.3 The above submissions of the Appellant to demonstrate the independent existence of SPP as well as other units and also their defence that the other units cannot be termed as "dummy units" because of the above independent physical existence, has not been countered adequately by the Adjudicating Authority. The assertions of the Appellants are on the strength of the documentary evidence and hence, mere denial and as unacceptable by the revenue cannot hold any water. The Adjudicating Authority relying upon the Hon'ble Supreme Court's decision in the case of Modi Alkalies & Chemicals Ltd 2004 (171) ELT 155 (S.C) has observed in para 20.6 of the impugned Orderin-Original as under: - "The Supreme Court in the case of Modi Alkalies & Chemicals Ltd 2004 (171) ELT 155 (S.C) had held that pervasive financial and management control are prima facie indicators of interdependence but adjudication that ....
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....ash by these disputed units were not actually made by them and all the transactions are mere book adjustments made at the behest of the noticee." 9.6 The above findings of the Adjudicating Authority would not evidence pervasive financial control by SPP on the DUs as during the period as necessary proof of these transactions being reflected in the books of accounts and their Income Tax returns has been submitted by the appellant. Further, as per the provisions of Income Tax, whereby, the allowance for cash payment under the relevant provisions of Income Tax Act and rules made there under, during the disputed period was Rs.20,000/- and not Rs.10.000/- as observed in the impugned order. 10.0 In respect of the allegation and finding that there existed a few common resources between SPP and others, as rightly contented by the appellants, sharing of few common expertise would not be a determining factor for clubbing of units. In the case of CCE Kanpur Vs. Sharad Industries [2013 (294) ELT 561(TRI-TEL)], it was observed that the evidence of common office premises, common staff, common maintenance of records cannot be a sufficient ground to club the clearances of the u....
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....rs, then why the records pertaining to previous years were kept/abandoned in the premises of SPP or Flint paper and Plastic industry. Are they not answerable to VAT and Income tax authorities for the transactions of previous years?" 10.3 The above finding of the Adjudicating Authority has ignored the vital fact that the inspection happened on a much later date to that of the disputed period and that too after the merger. So, it is expected that the records of the previous years would be kept only in the merged entity. This is also a precise answer to the question framed by the adjudicating authority that sthey are kept as per the VAT/IT requirements. 11.0 With respect to the allegation of mutuality of interest between SPP and other units, the Show Cause Notice as well as the Order-in-Original based their findings on the fact that SPP had beneficial interest by taking over the disputed units post 2017. In this connection, the appellant has contended that mutuality of interest is an interest which should flow from both the ends, whereas, the department has not alleged any beneficial interest at the hands of the disputed units, to constitute a mutuality. Further, ....
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....f clearances. In a case where the entire goods were sold to the other units itself was held not to be a ground for the clubbing of clearances, the instant case would fall on a better footing when the goods manufactured by RP units were also sold to various third parties. In fine, when there is no allegation or finding that there is any under valuation constituting a flowback, sale of goods between the units cannot form a ground for clubbing of value of clearances. 13.0 The Order-in-Original has also taken cognisance of certain financial transactions whereby certain loans have been taken by SPP/Flint Paper and Plastic Industry from the other disputed units. In this connection, the counsel would submit that all the loans were only through banking instruments and were repaid along with appropriate interest and thus, they are proper financial transactions on the principal - to - principal basis and cannot be a ground to allege or conclude a financial flowback between the units and consequent ground to club the value of clearances. 14.0 We find that the above averments of the appellants remain undisputed that all the loans were repaid through banking channels with appropri....