2000 (5) TMI 95

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.... September 1997 and October 1997 to February 1998, holding that M/s. S.K.N. Associates had deliberately created another unit which was fully owned and controlled by them in order to circumvent monetary limit of aggregate value of clearances specified under SSI exemption Notification and that, therefore, the value of clearances of both appellants are to be clubbed for computing the aggregate value of clearances under Notification 175/86 dated 1-3-86 and Notification 1/93 dated 28-2-93. He has also imposed a penalty equal to duty amount on M/s. S.K.N. Gas Appliances under Section 11AC of the Central Excise Act. 2. The facts of the case are that the appellant No.2 (M/s. S.K.N. Associates P. Ltd.) (established in 1983) was engaged in the man....

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....recovery of duty as well as penal action only on appellant No. 2, no show cause notice was issued to appellant No. 1, the notices were adjudicated by the Commissioner who confirmed the duty demand against Appellant No. 2, but imposed penalty equal to duty demand on appellant No. 1. Hence these appeals. 3.  We have heard Shri K.K. Anand, Learned Advocate and Shri M.P. Singh, Learned D.R. 4. The contention of the appellants is that non-issue of show cause notice to M/s. SKN Gas Appliances whose clearances have been clubbed with those of M/s. SKN Associates itself vitiates the entire proceedings and in this connection he relies upon the decision of the Tribunal in the case of M/s. Ogesh Industries v. Collector of Central Excise, Kan....

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....e sold the plant and machinery for manufacture of LPG gas stoves and cooking ranges under regular invoice to M/s. SKN Gas Appliances. This by itself does not create mutuality of interest in the business of each other. The invoice under which M/s. SKN Associates sold plant and machinery, etc. to M/s. SKN Gas Appliances is invoice No. 4058, dated 13-6-1992 whereas invoice No. 4068 under which the goods were sold to M/s. Venus Agencies is dated 16-6-1992. The appellants have explained that one invoice number was given to both the invoices due to misprinting. The material on record is not sufficient to support the finding that the invoices are fabricated or forged. Further the mere fact that the rented premises of both the units were owned by M....

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....ome of the employees of M/s. SKN Associates joined M/s. SKN Gas Appliances cannot be a ground to club the clearances of that unit with the clearances of M/s. SKN Associates. When M/s. SKN Associates stopped manufacturing LPG gas stoves and cooking ranges, naturally they did not require the services of some of their staff who were then free to join any organisation. Further the adjudicating authority has himself accepted that there is no clinching evidence of financial flow back. The material on record is not sufficient to hold that one unit was merely a facade and to hold that there was mutuality or interest between the two units. 8. On the aspect of applicability of the extended period of limitation, we note that the Department was all ....