TaxTMI 
TaxTMI 
2005 (9) TMI 180
X X X X Extracts X X X X
X X X X Extracts X X X X
....M/s. Hare Krishna Industries (HKI) a proprietary concern is not a dummy of M/s. Pioneer Detergent (P.D.) another proprietary concern. The allegations in the show cause notice are that MND was a dummy of VDCPL and HKI was a dummy of P.D. and therefore the clearances of detergent cakes shown to have been made by the dummies should be clubbed with the real ones and SSI exemption denied. The show cause notice demands Rs. 31,87,165/- from VDCPL and Rs. 3,72,825/- from M/s. P.D and for the 91-92 to 93-94. The show cause notice also alleges that both these assessees have failed to include the amounts paid as royalty to Shreeji Chemicals and advertisement expenses while arriving at the assessable value of the detergent cakes while computing the dut....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... letter dt. 5-3-1993 of the Assistant Commissioner, Central Excise, Division II, Mehsana, granted to M/s. M.N. Detergents under Rule 57H of the Central Excise Rules, 1944, the Exemotion Certificate dated 7-4-93, issued by the Assistant Commissioner, Sales Tax, Mehsana and the Registration Certificate for capital investment subsidy (1990-95) issued by the District Industries Centre, Mehsana, Industries Department, Gujarat State are the positive pieces of evidence, which establish the manufacturing activity of M/s. M.N. Detergents. In addition to this, the then Supdt., Central Excise in-charge of the unit, Shri J.B. Shah, during the course of his testimony at the time of personal hearing on 26-12-97 has deposed that he had issued licence to M....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Even in the show cause notice dated 26-8-95, it has been mentioned that Shri Arvindbhai Patel was not the authorized signatory of M/s. M.N. Detergents. As such, Shri Arvindbhai Patel was not legally right to give any statement on behalf of M/s. M.N. Detergents, particularly at the back of the proprietor or authorized person of the said M/s. M.N. Detergents, which was against the said unit, i.e. M/s. M.N. Detergents. Accordingly, there is no justification to give any credence to the said statement 7-1-94. Thus, it is found that there is no concrete or reliable evidence to prove that M/s. M.N. Detergents did not manufacture goods on its own and their clearances were only on paper or fictitious. The clubbing of clearances of M/s. M.N. Deterge....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hese findings. Hence the appeal. 6.None present for the respondents. Heard the Ld. JDR Shri R.B. Pardesi and perused the records. 7.The grounds in the appeal are that the Commissioner erred in holding that the pre-budget stock declared by M/s. MND was verified by the Department, under Rule 57H; that he failed to appreciate the fact that M/s. M.N. Detergent's electricity consumption was such that they could not have produced the quantities as declared by them; that M.D. Patel who was looking after the affairs of VDCPL has clearly stated that only M/s. VDCPL produce detergent cakes; that wrapping machine claimed to have been purchased by MND was never purchased by them; that the Commissioner failed to take this vital evidence into consi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... PD respectively. The Commissioner relied on the version of the Supdt. of Central Excise who deposed in his cross-examination that MND had the machinery to produce the goods. He discarded the panchnama as it was drawn in the absence of the owners and the one person whose statement was relied upon (Arvindbhai Patel) retracted it. He further relied on the version given by the concerned persons in their representations. One cannot find fault with these findings. The Commissioner's attempt to rely on the various case law is however misplaced. In these matters (clubbing) the facts differ and the evidence is required to examine in the light of the facts in each case. The Department in this case wants to rely mostly on the panchanama to hold on to....