Supreme Court - Daily Orders
Commnr.Of Cent.Excise, Bangalore vs M/S.P.J.Margo Pvt.Ltd. . on 16 September, 2015
Bench: A.K. Sikri, Rohinton Fali Nariman
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5851 OF 2006
COMMISSIONER OF CENTRAL EXCISE, BANGALORE ... Appellant
VERSUS
N.M.S. BABU
AUTHORISED SIGNATORY
M/S. P.J. MARGO PVT.LTD. & ORS. ... Respondents
O R D E R
The present appeal arises out of five appeals that were filed in Customs, Excise and Service Tax Appellate Tribunal, (hereinafter referred to as 'CESTAT') against the Order-in-Original dated 12.10.2004 passed by the learned Commissioner of Central Excise. These appeals, in turn, arise out of six Show Cause Notices being (1) Notice dated 12.03.2001 covering the period from 01.04.1997 to 31.03.2000, (2) Notice dated 26.06.2001 covering the period from 01.04.2000 to 31.03.2001, (3) Notice dated 07.05.2002 covering the period from 01.07.2001 to 31.03.2002, (4) Notice dated 24.01.2003 covering the period from 01.04.2002 to 30.09.2002, (5) Notice dated 24.01.2003 covering the period from 01.04.2002 to 30.09.2002 and (6) Notice dated 24.06.2003 covering the period from 01.10.2002 to 31.03.2003.
Signature Not Verified
A large number of issues were decided by the impugned Digitally signed by ASHWANI KUMAR Date: 2015.12.11 15:26:58 IST Reason: judgment dated 25.10.2005, but Shri A. K. Panda, learned C.A. No. 5851/2006 1 Senior Counsel appearing on behalf of the Revenue, has confined himself to two of these issues. According to him, the CESTAT has not dealt with whether a subsidiary company, viz., Respondent No. 3 in the present appeal, is only a dummy, consequent to which the excisable goods manufactured by it needs to be clubbed with its holding company, viz., Respondent No. 1. If this is done, it is an admitted position that the terms of Notification No. 7/97 dated 01.03.1997, which exempts Small Scale Units if the aggregate value of clearances of all excisable goods do not exceed three crores in the preceding financial year, will not apply as the aggregate value of excisable goods produced from both companies together would exceed three crores.
Mr. Panda has further argued that the CESTAT has not dealt with the ground of suppression of material facts by both the holding company and the subsidiary company and has merely referred to a single letter of the subsidiary company which does not lead to the position that suppression is not made out on facts.
On the other hand, Shri S. K. Bagaria, learned Senior Counsel appearing on behalf of the Respondent Nos. 1 and 3, argued before us that the nine factors stated by the learned Commissioner of Central Excise in his order dated 12.10.2004, all of which showed that Respondent No. 3 was, in fact, a dummy of Respondent No. 1, were only trotted out from the Show Cause Notice itself without any discussion of C.A. No. 5851/2006 2 the detailed reply sent by Respondent Nos. 3 and 5 answering all these grounds to the Show Cause Notice.
We are of the view that the issue as to whether the excisable goods manufactured by the holding company and the subsidiary company have to be clubbed together has not been satisfactorily answered either by the learned Commissioner or by the CESTAT in the impugned judgment.
In the impugned judgment, the CESTAT, without adverting to either the facts stated in the Show Cause Notice or the reply thereto, directly arrived at a conclusion that the manufacture of the excisable goods by both the holding company and the subsidiary company cannot be clubbed only on the basis of a circular dated 29.05.1992. A cursory reading of the circular would show that it refers to a completely different Notification and not to Notification No. 7/97 dated 01.03.1997.
In fact, this Court, in 'Commissioner of Central Excise, New Delhi v. Modi Alkalies & Chemicals Ltd. & Ors. [2004 (7) SCC 569] has held that this very circular would have no relevance to notifications other than the Notification mentioned therein. This judgment was followed in 'Parle Bisleri Private Limited v. Commissioner of Customs and Central Excise, Ahmedabad' [2010 (14) SCC 378].
It is clear, therefore, that the sole basis on which the CESTAT has decided the issue of clubbing is bad in law. C.A. No. 5851/2006 3 Equally, on the issue of suppression of material facts leading to the extended period of limitation being applicable to the first of the six Show Cause Notices, the CESTAT is equally cursory, relying upon one letter dated 20.07.1998 sent by the subsidiary company in which nothing is stated from which it can be said that there is suppression or otherwise of facts except the fact that M/s. Margo Bio Controls (P) Ltd. happens to be a 100 per cent subsidiary of the holding company viz., M/s. P.J. Margo (P) Ltd.
We are, therefore, of the opinion that this case should be remanded to the CESTAT to decide afresh as to whether any case for clubbing of excisable goods manufactured by the holding company and the subsidiary company is or is not made out on facts. Equally, the issue as to whether or not there has been suppression of material facts by both the aforesaid companies is also sent back for a re-determination on facts.
As this is an old matter, we request the CESTAT to take up the matter and decide it within a period of six months from the date of receipt of a copy of this order.
The appeal is disposed of in the above terms.
..........................., J.
[ A.K. SIKRI ] ..........................., J.
New Delhi; [ ROHINTON FALI NARIMAN ] September 16, 2015.
C.A. No. 5851/2006 4 (REVISED) ITEM NO.103 COURT NO.14 SECTION III S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No. 5851/2006 COMMNR.OF CENT.EXCISE, BANGALORE Appellant(s) VERSUS N.M.S. BABU AUTHORISED SIGNATORY M/S.P.J.MARGO PVT.LTD. & ORS. Respondent(s)
Date : 16/09/2015 This appeal was called on for hearing today. CORAM :
HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Appellant(s) Mr. A. K. Panda, Sr. Adv. Ms. Shirin Khajuria, Adv. Mr. K. Parameshwar, Adv. Mr. B. Krishna Prasad, Adv.
For Respondent(s) Mr. S. K. Bagaria, Sr. Adv. Mr. Ramesh Singh, Adv. Mr. Raghu Raman, Adv.
Mr. Raghvendra, Adv.
Ms. Anna Mathew, Adv.
Mr. Kumar Ajit Singh, Adv. Mr. Suman Jyoti Khaitan, Adv.
UPON hearing the counsel the Court made the following O R D E R The appeal is disposed of in terms of the signed order.
(Nidhi Ahuja) (Renu Diwan)
COURT MASTER COURT MASTER
[Signed order is placed on the file.] C.A. No. 5851/2006 5 ITEM NO.103 COURT NO.14 SECTION III S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No. 5851/2006 COMMNR.OF CENT.EXCISE, BANGALORE Appellant(s) VERSUS M/S.P.J.MARGO PVT.LTD. & ORS. Respondent(s) Date : 16/09/2015 This appeal was called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Appellant(s) Mr. A. K. Panda, Sr. Adv. Ms. Shirin Khajuria, Adv. Mr. K. Parameshwar, Adv. Mr. B. Krishna Prasad, Adv.
For Respondent(s) Mr. S. K. Bagaria, Sr. Adv. Mr. Ramesh Singh, Adv. Mr. Raghu Raman, Adv. Mr. Raghvendra, Adv. Ms. Anna Mathew, Adv. Mr. Kumar Ajit Singh, Adv. Mr. Suman Jyoti Khaitan, Adv.
UPON hearing the counsel the Court made the following O R D E R The appeal is disposed of in terms of the signed order.
(Nidhi Ahuja) (Renu Diwan)
COURT MASTER COURT MASTER
[Signed order is placed on the file.] C.A. No. 5851/2006 6