Customs, Excise and Gold Tribunal - Delhi
H. Guru Instruments (North India) Pvt. ... vs C.C.E. on 7 September, 1995
Equivalent citations: 1995(80)ELT846(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. The above captioned appeals involve common issues. They are therefore being disposed of by this common order.
2. Brief facts of these cases are as under :
A. No. E/942/93-B : M/s. H. Guru Instruments (P) Ltd. (hereinafter referred to as the founder company) having their factory at Calcutta are engaged in the manufacture of scientific instruments. In 1981, the founder company acquired an industrial plot in Sahibabad from U.P. State Industrial Development Corporation with the intention of setting up another factory for the manufacture of scientific instruments. In the year 1983, a new company under the name of H.. Guru Instruments (North India) Pvt. Ltd was incorporated with different shareholders but with Shri G. Hazra as Managing Director who was also the Managing Director of the founder company. With the intention of transferring the new factory at Sahibabad together with its assets and liabilities to the new company, a sale deed dated 16-10-1983 was drawn up by the founder company but on account of the objections raised by the U.P. State Industrial Development Corporation, the sale deed could not be executed. It has been claimed that thereafter the factory at Sahibabad was leased out to the appellant company in terms of the lease deed executed on 7-11-1983 but appellant company continued its association with M/s. H. Guru Marketing Co. (Pvt.) Ltd., Calcutta another company set up by the founder company, to act as their selling agents. The appellant company thus conducted its sales directly as well as through M/s. H. Guru Marketing Co. (Pvt.) Ltd., Calcutta, The goods manufactured by the appellant company being classifiable under Item 68 of the erstwhile Central Excise Tariff, in terms of Notification No. 77/85-C.E., dated 1-3-1985, annual production of goods valued upto Rs. 30 lakhs was exempted from payment of duty. Since aggregate clearance of the appellant company were expected to be less than Rs. 30 lakhs during the year 1984-85, it did not obtain L-4 licence but filed the requisite declaration before the Superintendent of Central Excise. On account of increase of production during the year 1985-86 after obtaining L-4 licence, the appellant company filed a Classification List No. 71/85 effective from 1-4-1985 claiming the benefit of exemption under Notification No. 77/85-C.E., dated 1-3-1985. However, after making certain enquiries, the Assistant Collector denied the benefit claimed by the appellant on the ground that the goods falling under Tariff Item 68 manufactured by the appellants under the brand name "GURU" had to be deemed as having been manufactured on behalf of M/s. H. Guru Instruments (P) Ltd., Calcutta whose turnover was in excess of Rs. 75 lakhs in the preceding year. Accordingly, the Assistant Collector held that the goods manufactured by the appellants were chargeable to Central Excise duty @ 10% ad valorem. Being aggrieved by the order passed by the Assistant Collector the appellants preferred an appeal before the Collector Central Excise (Appeals) New Delhi who by his Order-in-Appeal No. 441/MRT/85 remanded the case for de novo proceedings on the ground of denial of principles of natural justice. Accordingly, the Assistant Collector issued a show cause notice dated 10-2-1986 alleging that the appellant was a dummy company floated by the founder company for the purpose of avoiding the payment of proper central excise duty. The show cause notice further alleged that the activities of the appellant company was entirely controlled by the founder company. The appellants denied the allegations in the show cause notice and claimed that they were an independent company having their separate registered office and income tax registration. They contended that they were to be treated as a separate entity even though the founder company and the appellant company had a common Managing Director. However, by an order dated 20-2-1990, the Assistant Collector held that the appellant company alongwith the founder company and their sole-selling agents, namely, M/s. H. Guru Marketing Co. (P) Ltd. were one and the same and accordingly, benefit of Notification No. 77/85-C.E., dated 17-3-1985 was not admissible in respect of the clearances made by the appellant company. The appellants preferred an appeal against the order passed by the Assistant Collector. However, by the impugned order the Collector (Appeals) Central Excise, Ghaziabad upheld the findings of the Assistant Collector. The appellants have preferred the present appeal against the said order dated 30-12-1992 passed by the Collector (Appeals).
3. Appeal No. E/1471/94-B : On 25-7-1985, the Preventive Officers of the Central Excise visited the appellants factory and seized certain records. Manufactured goods valued at Rs. 1,44,625 were also seized on the ground that they had not been entered in the relevant Central Excise records such as RG-I. On the basis of records seized on 25-7-1985 and enquiries made thereafter, a show cause notice dated 21-1-1986 was issued by the Deputy Collector of Central Excise, Ghaziabad alleging that the appellant unit was a subsidiary company of M/s. H. Guru Instruments (P) Ltd., Calcutta and with the assistance of M/s. H. Guru Marketing Co. (Pvt.) Ltd., Calcutta, they had contravened various provisions of Central Excise Rules. The appellants were asked to show cause why the goods seized on 25-7-1985 should not be confiscated and why penalty should not be imposed on them under Rule 173Q. They were also asked to show cause why duty should not be demanded on goods found short at the time of the visit of officers and also on goods cleared by them without payment of duty during the period from 1-10-1983 to 25-7-1985. The appellants vide their letter dated 7-7-1988 in reply to the show cause notice denied the allegations made in the show cause notice. They mainly contended that they were an independent company engaged in the manufacture of goods on their own behalf. They also questioned the validity of the show cause notice on the ground that only Collector was competent under Section 11A to issue the notice in the event of allegation of suppression of facts. However, the Collector of Central Excise, Meerut vide his order dated 10-11-1987 held that the appellants and founder company at Calcutta were not entitled to separate exemption and the productions of the two units had to be clubbed together for determining their eligibility for exemption under Notification No. 75/85-C.E., dated 17-3-1985. The Collector held the charge in regard to the demand of duty as set out in the show cause notice as proved. He confiscated the seized goods valued at Rs. 1,44,655. He also imposed penalty of Rs. 1 lakh on the appellants. Being aggrieved by the said order, the appellants filed an appeal before the Customs Excise & Gold (Control) Appellate Tribunal. The Tribunal allowed the appeal and set aside the order dated 26-6-1988 passed by the Collector. The Department filed an appeal before the Tribunal which was dismissed vide order dated 22-11-1988 passed by the Tribunal.
4. While a reference application of the Department was pending, the Additional Collector of Central Excise issued a show cause notice dated 8-9-1988 to the appellants and M/s. H. Guru Instruments (P) Ltd. and M/s. H. Guru Marketing Co. (Pvt.) Ltd., Calcutta, on the same grounds as in the earlier show cause notice issued by the Deputy Collector of Central Excise, Meerut. The appellants submitted a reply to the show cause notice dated 8-9-1988 in which all the allegations were denied. They contended that the turnover of the companies at Calcutta or at any other place could not be deemed as on their behalf and, therefore, the question of clubbing their turnover with the turnover of any other company did not arise. The appellants also contended that the demand of Rs. 3,21,198.20 vide show cause notice dated 8-9-1988 for the period 1-10-1983 to 25-7-1985 was time barred since they had not mis-stated or suppressed any facts. However, by the impugned order dated 13-4-1994, the Collector confirmed the said demand and imposed a penalty of Rs. 3 lakhs on the appellants.
5. In the case which is the subject matter of the Appeal E/942/93-B1, Shri Bipin Garg, Learned Advocate appeared before us. He submitted that the impugned order was not sustainable since registered companies are to be deemed as separate entities and they are entitled to separate exemption under the relevant notification of the Govt. of India. In support of his contention he referred to the Trade Notice No. 53/92, dated 11-11-1992 issued by the Meerut Collectorate. He argued that the mere fact that some shareholders were common or the premises used are common and telephone and telegraphic address are same and the employees are common or there are some common Directors would not make any difference. He submitted that the lower authorities had ignored the fact that the Department had been allowing the founder company and another company set up by the founder company in South India to avail the exemption under the relevant notification independently by treating them as separate entities. He stated that the sale agreement drawn up between the two companies could not go through on account of certain objections raised by the UPSIDC and thereafter a lease deed was executed in 1983 in terms of which the appellant company acquired independent status. He submitted that the appellant company was using the brand name "H. Guru" under a valid agreement and for its use it had been paying royalty to the founder company. He contended that it was erroneous on the part of the adjudicating authority to hold the appellants as a dummy of the founder company merely because the sole-selling agent was common for both companies. He submitted that it was a common practice in the trade for companies to act as sole-selling agents for different principles. He argued that the fact that Managing Director of both the companies was the same would also not go against the appellants, since the other Director of the appellant company, namely, Shri D.P. Hazra was not even a Director in the founder company. As regards the findings in the impugned order that the lease rent was not specified in the lease deed, the Learned Counsel submitted that this was due to a clerical error which was later rectified. He argued that the lower authorities had overlooked the fact that there was no common funding or financial flow back between the companies. He contended that the observations in the impugned order about certain entries made in the appellants final accounts for the year 1984-85 relating to hire charges, commission and royalty were extraneous to the show cause notice. He further contended that the fact that almost 50% of the amount of turnover had been paid on account of hire charge, commission and royalty to the founder company would also not go against the appellant since such payments were not unusual.
6. In support of his contention, the Learned Counsel cited the following case Law:
Prima Controls (P) Ltd. & Am, v. CCE, Pune -1994 (72) E.L.T. 62 (Tri.);
Alpha Toyo Ltd. and Ors. v. CCE, New Delhi -1994 (71) E.L.T. 689 (Tri.);
Cheryl Laboratories v. CCE, Hyderabad - 1993 (65) E.L.T. 596 (Tri.);
Sri Ranga Industries v. CCE -1993 (67) E.L.T. 712 (Tribunal);
SPL Machinery v. CCE, Coimbatore - 1995 (75) E.L.T. 362 (Tribunal);
7. Dealing with the submissions made by the Learned Counsel for the appellants Shri Somesh Arora Ld. JDR referred to the impugned order and submitted that the appellant company was set up by M/s. H. Guru Instruments Pvt. Ltd., Calcutta and despite the claim that it was an independent unit there was ample evidence to show that it was only a subsidiary of the founder company and had been set up for the purpose of evasion of excise duty. He stated that the unit at Ghaziabad was set up by M/s. H. Guru Instruments (P) Ltd., Calcutta and for this purpose a plot was taken form U.P. State Industrial Development Corporation and funds were raised by the company from UPFC. He contended that the appellants had attempted to give the impression that the unit at Ghaziabad was a separate entity having no connection with the parent company at Calcutta by drawing up a sale agreement but they had not succeeded in their plan on account of the objection raised by the U.P.F.C. He added that thereafter the appellant had claimed that the company at Ghaziabad had acquired independent status on account of the Lease Deed dated 7-11-1983 under which the Calcutta Company had leased the factory at Ghaziabad to the appellants. He contended that the lease agreement was not reliable since it did not even mention the lease amount. He argued that the appellants' contention that the omission to mention the lease amount was on account of a clerical error does not carry any conviction and only confirms the Department's claim that an attempt had been made to show that the appellants were an independent company when, in fact, they were a subsidiary of the Calcutta Company. He referred to the order passed by the Collector (Appeals) and contended that the wide variation between monthly lease amount claimed to have been agreed under the lease deed and the actual payment on this account reflected in the Balance Sheets for the period ending 30-6-1984 and 30-6-1985 also showed that the so-called lease deed executed by the Calcutta Company was totally unreliable and the control of the unit at Ghaziabad continued to remain with the founder company at Calcutta. He referred to the remaining findings of the Collector (Appeals) and stated that the fact that a large part of the sale proceeds of the appellants had been paid to the founder company at Calcutta by way of hire charges, royalty and commission was also indicative of the fact that the Ghaziabad unit was managed and controlled by the Calcutta Unit and had been set up only for the purpose of avoidance of tax. He contended that under these circumstances as held by the Collector (Appeals) it was permissible to disregard the legal facade created by the appellants and their parent company and to treat them as one and the same and to club their clearances for the purpose of exemption under Notification No. 77/85, dated 1-3-1985.
8. In the matter of Appeal No. E/1471/94-B, Shri A.P. Mathur, Learned Advocate on behalf of the appellants, submitted 'that the impugned order passed by the Collector, Central Excise, Meerut holding that the appellant was a dummy unit controlled by the founder company was erroneous. He contended that the Collector had erred in demanding duty from the appellant in terms of the demand confirmed by him by the impugned order since in terms of his finding that the appellants were only a dummy unit created by M/s. H. Guru Instruments Private Ltd., the demand for duty could have been confirmed only against the founder company and for the same reason the penalty could have been imposed only to the founder company. He reiterated his stand that it was incorrect on the part of the Collector to allege that the appellant was a dummy whose activities were controlled by M/s. H. Guru Instruments Pvt. Ltd. Calcutta since the appellants were registered separately under Sales Tax and Income Tax Act and there was no flow back of funds from the appellant to the Calcutta firm. He stated that the Collector had also erred in holding that prior to 1984 when the appellants obtained an Import Licence the raw materials needed by the appellants were being supplied by the founder company. He submitted that the fact that the import licence was issued to the appellants supported their claim that they were a separate entity. As regards the Collector's finding that the orders received by the founder company at Calcutta were passed on to the appellants and the supply of finished products to the customers was always made by the Calcutta company alongwith test guarantee and materials certificate of the Calcutta company, he contended that there was nothing irregular in this arrangement since in respect of certain orders received by the founder company they were using the appellants as a job worker. He stated that in such cases the goods were finally supplied by the Calcutta company. In terms of the orders received by them from customers they were entitled to place guarantee card and the material certificate at the time of finally executing the order.
He contended that the Collector's order was based on conjectures and surmises and he had failed to take into account the Lease Deed executed by the founder company in terms of which the appellants could run the factory at Ghaziabad using the plant, machinery and other installations such as telephone etc. He argued that in any case the demand issued by the Department was totally time-barred since the entire facts relating to the setting up of the appellants factory at Ghaziabad and the developments that took place from time to time were known to the Department in view of the statement dated 25-7-1985 of Shri P.P. Vyas Works In-Charge at the appellants factory and the declaration/classification lists filed by the appellants from time to time. He added that the impugned order was not sustainable also for the reason that the demand raised on identical grounds and for the same period in terms of show cause notice dated 21-1-1986 issued by the Deputy Collector of Central Excise, Ghaziabad was finally held by the Tribunal as not sustainable vide Order No. 425/88-D, dated 26-8-1988. On these grounds, Shri Mathur pleaded that the impugned order may be set aside.
9. Dealing with the submissions made by Shri Mathur in Appeal No. E/1471/94-B, Shri Arora, Learned JDR took us through the impugned order. He stated that as brought out in the order passed by the Collector the appellant company continued to be owned and controlled by the parent company at Calcutta and the appellants were only a dummy unit set up only with the objective of separately availing of the exemption admissible to SSI units under the relevant notification. He therefore pleaded for the rejection of the appeal.
10. We have examined the records of the case and considered the submission made on behalf of both sides. It is seen that the following are main points that arise for consideration in this case :
(i) Whether M/s. H. Guru Instruments (North India) Private Ltd. Ghaziabad, U.P. have to be deemed as a dummy unit created and controlled by M/s. H. Guru Instruments Ltd., Calcutta and for that reason the goods manufactured by M/s. H. Guru Instruments (North India) Ghaziabad have to be deemed as having been manufactured for and on behalf of the Calcutta Company for the purpose of exemption under Notification No. 77/85-C.E., dated 1-3-1985;
(ii) Whether the demand of Rs. 3,21,198.20 for the period 1-10-1983 to 25-7-1985 confirmed against M/s. H. Guru Instruments (North ; India) Private Ltd. vide the impugned order dated 13-4-1994 has to be deemed as time-barred; and
(iii) Whether the penalty of Rs. 3 lakhs imposed on the appellants by the said order is sustainable.
11. Taking up the first point we find that M/s. H. Guru Instruments Private Ltd., Calcutta incorporated under the Indian Companies Act and having their factories at Calcutta and Bangalore were engaged in the manufacture of scientific instruments in their factories at Calcutta and Bangalore. As a part of their expansion programme, in 1981 they set up another factory at Sahibabad for the manufacture of similar goods after acquiring an industrial plot from the U.P. State Industrial Development Corporation. For the setting up of the new factory they were sanctioned a loan by the U.P. Financial Corporation. In 1983 a company in the name and style of M/s. H. Guru Instruments (North India) Pvt. Ltd. was incorporated with Sri Gurudas Hazra as Managing Director and Sri Debi Prasad Hazra as Director. Thus Sri G. Hazra was the common Managing Director of the founder company as well as the new company set up at Sahibabad. The objective of the new company was to acquire and take over the assets and liabilities including development expenditure of the Sahibabad unit of M/s. H. Guru Instruments Pvt. Ltd. on the terms and conditions as incorporated in the Memorandum and Articles of Association of the company. The new company started production and clearance from the factory at Sahibabad with effect from 1-10-1983 without execution of any legal agreement with the founder company in regard to the taking over of the plant and machinery. An agreement dated 17-10-1983 providing for the sale of the factory was drawn up but the formalities for the sale and transfer of the factory were never completed and the agreement remained unexecuted.
12. It is seen that the unit at Sahibabad in U.P. was set up by M/s. H. Guru Instruments (P) Ltd. Calcutta, after obtaining financial assistance from U.P.F.C. Thereafter with the objective of creating a separate legal entity for the purpose of availing various tax benefits M/s. H. Guru Instruments (NI) Pvt. Ltd. was incorporated and registered as a separate company with the objective of taking over the assets and liabilities of the unit set up at Sahibabad by the founder company. However, the agreement drawn up to show the sale of the asset of the founder company in the units set up at Sahibabad could not be gone through because of the objections raised by the financial institution. Thereafter in an attempt to give the colour of a separate legal entity to the company set up at Sahibabad, a lease deed was executed on 7-11-1983 to show the transfer by way of lease the asset of the Calcutta company in the unit at Sahibabad. However, we are inclined to agree with the finding in the impugned order that this lease deed could not be taken as genuine or reliable evidencing actual transfer to the assets and liabilities of the factory set up at Sahibabad by the founder company since it did not even mention the lease amount or rent payable. Though it has been claimed that this omission was on account of a clerical error and the defect in the lease deed dated 7-11-1983 was rectified by a subsequent lease deed, in our view, the lease deeds in question remained suspect and unreliable since, as observed by the Collector (Appeals), as against the lease rent of Rs. 2,74,000/- per month claimed to have been agreed to between the parties the actual hire charges reflected in the Balance Sheets for the period ending 30-6-1984 and 30-6-1985 was only Rs. 2,80,186.15 and Rs. 3,68,779.00 respectively. For these reasons and also in view of the finding of the Collector (Appeals) that a large part of the appellants total realisations through sales were flowing to the founder company, we are inclined to hold that there was no genuine or legal transfer of the assets and liabilities of the factory at Sahibabad to the appellants by the founder company.
13. The appellants have relied upon various decisions of the Tribunal and contended that the mere fact that some shareholders were common or the premises used are common, the telephone and telegraphic address are same, the employees are common or there are some common Directors would not make any difference since the Department had allowed the founder company and another company set up by the founder company in Bangalore to independently avail the exemption under the relevant notification by treating them as separate entities. It has also been contended that the sale agreement drawn up between the two companies was not gone through on account of certain objections raised by UPSIDC who had advanced certain funds for setting up the unit at Sahibabad and accordingly a lease deed was executed in 1983 which conferred an independent status on the appellant company. It has been submitted that the appellant was using the brand name "H. Guru" under a valid agreement entered into in this regard with the founder company and for this purpose they had been paying royalty to the founder company. It has been argued that it was erroneous on the part of the adjudicating authority to hold the appellant company as a dummy of the founder company merely because the same company was acting as the sole selling agent for the appellant as well as the founder company and the Managing Director of both the companies was common. It has also been submitted that the finding in the impugned order that the lease rent was not specified in the lease deed cannot go against the appellant since this clerical error was rectified. The appellants have also submitted that the use of the address of the appellant company by the founder company for getting themselves registered with the Sales-tax Department would also not go against the appellants. Certain entries in the account of the appellant company for the year 1984-85 relating to hire charges, commission, royalty showed that almost 50% of the amount of turnover was flowing to the founder company. The appellants have argued that these observations are extraneous to the show cause notice and, in any case, the payment of royalty and such other charges would not go against the appellants. The appellants have argued that in the absence of any money flow back, profit sharing and total control between the two units, it would not be permissible to hold the one as dummy or mere facade of the other. They have also contended that it is well-settled that clearances of two units would not be clubbable even though there may be some common staff and use of common premises and machineries by the two units when there is evidence to indicate payment of rent by one firm for the machinery hired from the other and they are registered with the sales-tax authorities and income-tax authorities. The appellants have placed reliance on the decision of the Tribunal in SPL Machinery v. Collector of Central Excise reported in 1995 (75) E.L.T. 362 wherein it was held that the clubbing of clearances was not permissible unless it was shown by the Department that the two units were functioning as one entity.
14. In the case of Meteor Satellite Ltd. and Telstar Electronics, Ahmedabad v. Collector of Central Excise, Baroda reported in 1985 (22) E.L.T. 271, the Tribunal has observed that the Court or the Tribunal is entitled to lift the mask of corporate entity if the conception is used for tax evasion or circumvent tax obligation. In view of our findings above that there was no genuine or legal transfer of the assets and liabilities of the founder company to the appellant company, the various decisions of the Tribunal relating to units having common facilities such as premises, telephone and staff including common Directors relied upon by the appellants are not relevant and cannot be of any assistance to them. We, therefore, hold that the corporate veil has to be lifted and the appellant company M/s. H. Guru Instruments (NI) Pvt. Ltd. and the founder company M/s. H. Guru Instruments (P) Ltd., Calcutta, in which Shri G. Hazra is the common Managing Director, have to be treated as one and the same and not entitled to the exemption under Notification No. 77/85, dated 1-3-1985 separately.
15. The next point to be examined is whether the demand for the period 1-10-1983 to 25-7-1985 confirmed against the appellants vide impugned order dated 13-4-1994 was time-barred. In this regard, the appellants case is that the demand was time-barred since the facts relating to the setting up of the appellants factory at Sahibabad and the development that took place from time to time were known to the Department in view of the statement dated 25-7-1985 of Shri P.P. Vyas Works-in-Charge at the appellants factory and the declaration/classification lists filed by the appellants from time to time. It has also been contended that the demand confirmed by the Collector was not sustainable since it was raised on identical grounds and for the same period as the show cause notice dated 21-1-1986 issued by the Deputy Collector of Central Excise, Ghaziabad which was held by the Tribunal as not sustainable vide Order No. 425/88-D, dated 26-8-1988. We find that there is sufficient force in the appellants' contention that after a visit to the appellants factory the departmental officers had recorded statement of Shri PP. Vyas Works In-Charge of the appellants factory on 25-7-1985 which brought out the facts relating to the setting up of the factory at Sahibabad by M/s. H. Guru Instruments (P) Ltd., Calcutta, and transfer of assets and liabilities to the appellant company. It is also a fact that the appellant company had been filing declaration/classification lists from time to time. Further, demand raised on identical grounds vide show cause notice dated 21-1-1986 issued by the Deputy Collector of Central Excise, Ghaziabad was finally held by the Tribunal vide its Order No. 425/88-D, dated 26-8-1988 as not sustainable. From these facts it is evident that the departmental officers were throughout aware of the setting up of the factory at Sahibabad by the founder company M/s. H. Guru Instruments (P) Ltd., Calcutta and the subsequent developments including the creation of another company for the purpose of taking over the control and management of the factory together with other assets and liabilities of the founder company at Sahibabad. Under these circumstances it has to be held that there was no wilful mis-statement or suppression of facts by the appellants. We therefore hold that the Collector's order confirming the demand of Rs. 3,21,198.20 for the period 1-10-1983 to 25-7-1985 is not sustainable since the said demand having been raised by show cause notice dated 8-9-1988 was barred by limitation.
15. In the case of Pressure Cookers and Appliances Ltd. v. Collector of Central Excise, Chandigarh reported in 1987 (28) E.L.T. 555, the Tribunal relying upon the judgment of the Supreme Court in the case of Mc Dowell and Company Ltd. v. Commercial Tax Officer reported in (1985) 5 ECC 259 has held that colourable devices cannot be a part of tax planning and it would be wrong to encourage or entertain the belief that it would be honourable to avoid the payment of tax by resorting to dubious methods. Paras 39 to 41 of the said order of the Tribunal, being relevant, are reproduced below :
39. The learned counsel for M/s. PCA dismissed Mr. Sundra Rajan's enlistment of the McDowell judgment of the Supreme Court by saying that this judgment was irrelevant, that it might perhaps support penalty but it did not support the demand of duty etc. This is not a correct understanding. Mr. Sundra Rajan was right when he said that this judgment showed that the right thinking in tax matters was that not only evasion but avoidance of tax was beyond the pale of the law and that far from being tolerated or suffered as in the past, tax avoidance would henceforth be viewed as wrong-doing. We cannot understand why the judgment is not relevant; it is the only relevant judgment that has been quoted before us by the two sides. We do not know if the person who bought bottle, nipple and cap for the bottle feeder planned for his operation what was planned here. He bought bottle, nipple and caps and from their nature the rubber nipples and rubber caps will fit any feeding bottle. They do not need the exact measurements as have gone into manufacture of griller cuisinette plates and trays and others.
40. There seems to have been some confusion in the minds of the department about the stove and grillers but these need not deflect us unduly from our present direction. Whatever may have been done in the classification of the components, we are satisfied that the two cunsinettes are cookers and would therefore be assessable to duty under Tariff Item 33C of Central Excise Tariff. There may have been a certain awkwardness in the department's approach to the matter but we would not say that the flaws were such that they have destroyed the present case. The case is true and right.
41. The duty demanded by the Collector shall be paid. The imposition of penalty was proper and needs no revision."
16. In view of our finding that the appellant company and founder company at Calcutta were one and the same and the appellant company had been set up by the founder company merely for the purpose of evading Central Excise duty by separate availment of exemption under the relevant notifications relating to SSI Units, on the ratio of the Tribunal's order, extracted above, we hold that the Collector's order imposing penalty on the appellants is sustainable.
The appeals are disposed of in the above terms.