Custom, Excise & Service Tax Tribunal
Cce, Chandigarh vs M/S Suchita Steels (India) Ltd on 4 July, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Principal Bench, New Delhi
COURT NO. II
DATE OF HEARING : 04/07/13.
Excise Appeal No. 5054 of 2004
[Arising out of the Order-in-Appeal No. 520/CE/CHD/2004 dated 12/07/2004 passed by The Commissioner (Appeals), Central Excise Commissionerate, Chandigarh.]
CCE, Chandigarh Appellant
Versus
M/s Suchita Steels (India) Ltd. Respondent
Appearance
Shri Sanjay Jain, Authorized Representative (DR) for the appellant.
Shri K.K. Anand, Advocate for the Respondent.
CORAM: Honble Shri D.N. Panda, Judicial Member
Honble Shri Rakesh Kumar, Technical Member
Final Order No. 57030/2013 Dated : 04/07/2013
ORDER
Per. D.N. Panda :-
Revenue is in appeal being aggrieved by the appellate order passed by learned Commissioner (Appeals) setting aside the adjudication who had held that the value of clearances of Suchita Steels, Chandigarh, Suchita Steels, Mohali and M/s Stelco Engineers, Mohali are to be clubbed to grant option under Notification No. 9/1998 dated 02/6/1998, Notification No. 9/1999 dated 28/2/1999, Notification No. 9/2000 dated 01/3/2000 and Notification No. 9/2001 dated 1/3/2001 issued under Central Excise Act, 1944 for the financial years 1998-1999 to 2001-2002.
2. Learned Adjudicating Authority held that above three units were controlled by late Avdesh K. Garg. Therefore, clearances of all these three units shall be clubbed together in the name of Suchita Steels, Chandigarh to grant the option under the above notifications. That authority found that there was constitution of Suchita Steels of Mohali as a proprietorship from April 1998 till March 2000 and thereafter became a partnership concern of daughter of late Shri Avdesh Garg and late Shri Avdesh Garg. He also found that M/s Stelco Engineers, Mohali was a proprietorship of Ms. Bindu Garg wife of late Shri Avdesh Garg. He equally found that the M/s Suchita Steels of Chandigarh was a HUF concern where late Shri Avdesh Garg was a Karta. Suchita Steels, Chandigarh was formed in the year 1992 and Suchita Steels, Mohali was formed in 1998 while Suchita Steels, Mohali was existing from 1992. Therefore, no clubbing of clearances of Suchita Steels, Chandigarh and Suchita Steels, Mohali was done till 1998. Only from financial year 1998-1999 when Suchita Steels, Mohali came into existence, learned Adjudicating Authority found that there was a common electricity connection between Suchita Steels, Mohali and Stelco Engineers, Mohali, as well as, there was water connection and telephone connection for both. Few workers were common in both the units.
3. It was also noticed by learned Adjudicating Authority that a company called ATPL was formed under the Directorship of late Shri Avdesh Garg and his wife Mrs. Bindu Garg. That company was supplying raw material to Suchita Steels, Chandigarh at market price. With such background and without finding any pecuniary interest or financial flowback or financial control or managerial control, clubbing proposal was made in the show cause notice and that was confirmed in adjudication.
4. When the respondent was aggrieved by the adjudication order it came to learned Commissioner (Appeals) who categorically noticed that apart from the related persons being owner in the above three business concerns, there was no financial flowback of fund from two Mohali units to Chandigarh units or vice-versa. Similarly, he did not find any evidence on record to appreciate that the two Mohali units were either managed or controlled by late Shri Avdesh Garg.
5. Revenue submits that when there was common infrastructure, using of utilities and common manpower in both the units of Mohali the adjudication was rightly done.
6. Supporting the appellate order with the findings above it was argued by learned Counsel on behalf of respondents that all three units were distinct and even ATPL the raw material supply company was also found to be a different entity. Accordingly there cannot be clubbing of the clearances in the hands of Chandigarh unit, which was erroneously and unlawfully done in the adjudication. The appellate order has rightly found that the control by late Avdesh Garg was absent.
7. Heard both sides and perused the records.
8. When department recognise Suchita Steels was a different concern formed from the year 1992 it was not brought out that the fund of HUF was invested either in Suchita Steels, Mohali from 1992 or Suchita Steels, Mohali from 1998. Therefore, there was absence of investment by the Karta therein on behalf of the HUF. That brought out distinction to this case. So also there was no investment of the fund by Mohali Chandigarh for day-today carrying on the business by two Mohali units except that there was sharing of infrastructure and using of common utilities as well as availing service of manpower. There is nothing on record to show that late Shri Avdesh Garg was controller of these two Mohali units making the proprietors thereof as well as partner of M/s Suchita Steels, Mohali dummy. Nothing is on record to show that late Avdesh Garg was the financial controller as well as beneficiary of the three units. In absence of inextricable link between Avdesh Garg showing his vested interest in Mohali units, so also no pecuniary interest of Chandigarh unit in two Mohali units was proved. Therefore the adjudication cannot be approved.
9. In the result, the appellate order is maintained and Revenue appeal is dismissed.
(Dictated and pronounced in open court) (D.N. Panda) Judicial Member (Rakesh Kumar) Technical Member PK ??
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4EX/5054 of 2004