Customs, Excise and Gold Tribunal - Mumbai
Goldensun Laboratories vs Commissioner Of Central Excise on 20 May, 2002
Equivalent citations: 2002(145)ELT430(TRI-MUMBAI)
ORDER G.N. Srinivasan, Member (J)
1. This is an appeal filed by the assessee against the decision of the Commissioner of Central Excise and Customs, Surat, made in Order in-Original confirming demand of duty of Rs. 5,37,553/- and denying exemption claimed by the appellants under Notification 175/86.
2. The appellant is a partnership firm consisting of the following Partners :-
Smt. Shantaben N. Shah Smt. Pravinaben M. Shah Shri Surendra N. Shah Shri Jyotin N. Shah
3. The above partners continued to be same for the period 31st March, 1992 to 30th April, 1992. They were all related with each other. Today partners of the firm are Jyotin Navinchandra Shah, Anup Mukundlal Shah, Smt. Rina Surendra Shah and Bakula Jyotin Shah.
4. The assessee is manufacturing excisable goods falling under Chapter 29 of the Central Excise Tariff Act, and is carrying on business at Vapi, Dist. Valsad in the State of Gujarat. A show cause notice was issued on 29th March, 1994 by the Collector of Excise and Customs, Surat calling upon the assessee to show cause why exemption given under Notification 175 of 1986 should not be denied for the period 88-89 to 91-92 on the ground that the appellant firm was carrying manufacturing activity under the name and style of Golden Manufacturing Co. at Goregaon, Bombay thereby it had transgressed provisions of the said notification. Appellant gave its reply on 26th May, 1994 denying its liability inter alia, on the ground that the claim of the Department was barred by limitation; the returns of the two firms were assessed from time to time and the goods were also sold to Bombay unit as well as other clients in the normal course of business; there was no suppression of any material; both units functioned independently of each other; classification lists of the firms were approved regularly; assessee had mentioned that it had no other factory meaning thereby that the Bombay factory is different from Vapi factory and each is having separate L 4 licence issued by the Department. The adjudication authority after going through the records and considering the defence putforth by the appellant rejected the contentions of the assessee and confirmed the demand. Hence the present appeal.
5. It is contended by the appellant before us that the units at Bombay and Vapi are in different. States of India therefore they fall within the jurisdiction of different adjudication authorities. Just because the units have some or most of the common partners that does not alone enable the Department to club the turnover of both units for denying the notification. There is no evidence disclosed in the show cause notice about financial flow back. One point which was urged by the appellant was that in February, 1992 proceedings were initiated by the Department for clubbing of two units by Bombay authorities of the Central Excise which ended in its favour by the Commissioner (Appeals) which was never questioned by the Department. Therefore the present proceeding initiated by the Adjudicating Authority and confirming the show cause notice was wrong. The impugned proceedings may amount to the sitting in judgment by the adjudicating authority over Commissioner (Appeal)'s Order in Bombay proceedings. Several case laws relating to clubbing have been cited by the Advocate for the appellant. Learned DR'adopts the reasoning of the impugned order.
6. We have considered the matter. Partners of Bombay unit are -
Shantaben N. Shah Pravinaben M. Shah Surendra N. Shah Jyotin N. Shah The Assesses's firm has five partners as itemized in earlier portion of the order. It will be seen that the firm has five partners apart from four mentioned above, Viz. Smt. Reena S. Shah, four are common partners. Therefore the two firms cannot be treated as one and the same. It is true that the firm and the partners do not have independent existence legally. But that does not mean that in the instant case the two firms have no legal existence. The properties owned individually by the partners can be attached against the decree passed by the Court of competent jurisdiction against the firm. But here it is emphasised that one of the firms has five partners as against four in the other. Therefore the contention raised by the adjudicating authority cannot be accepted for clubbing the clearances of both units for consideration of exemption under Notification 175 of 86.
7. This takes us to next point namely the effect of the Bombay proceedings. It is contended by the Appellants that similar action namely denial of exemption under Notification No. 175/86 was proposed in respect of the Bombay unit in 1992. The adjudicating authority namely the Assistant Collector by his order-in-original dated 19th June, 1992 had dropped show cause notice dated 27th February, 1992. Against that order-in-appeal was filed before the Collector of Central Excise & Customs (Appeals) who by his order PKS/47/B, 11/94, dated 25th October, 1994, had upheld the order passed by the Assistant Collector supra. It is an admitted position that the Department did not file any appeal to the Tribunal against the said order of the Collector (Appeals). The adjudicating authority has observed as follows in the impugned order reading as under :
"The Collector (Appeals) appears to have discussed only some general aspects of the issue involved like separate registration under different taxation Act, separate premises situated in different States, commonness of partners. However, he did not appear to have taken into consideration the products manufactured by both the units, sales of the goods to the company.... . ...family of Bombay."
8. This observation of the adjudicating authority to our mind is legally wrong. He cannot sit in judgment over the order of the Collector (Appeals) in Bombay case as the department in the form of jurisdictional Collector administratively concerned did not thought fit to file any appeal feeling aggrieved before the Tribunal. That is why the Tribunal by its order dated 9-2-1995 had remanded the instant matter to the adjudicating authority to consider all the aspects in accordance with law. If the department was aggrieved against the orders of the Collector (Appeals) dated 26th October, 1994 (Bombay case) and the Tribunal (in the instant case) dated 9-2-1995 it ought to have filed respective appeals against the same. That not having been done by the Department the adjudicating authority cannot set aside the finding of fact by the Collector (Appeals) in the above said order as though sitting as an appellate authority over Collector (Appeals). We are therefore of the view that in the impugned order the finding of fact by the Collector (Appeals) cannot be assailed by the adjudicating authority in this way. We are conscious of the fact that the Goregaon unit and Vapi Unit come under different jurisdiction of two different Collectorates, But that does not mean clubbing of two factories owned by two different firms having some of the common partners will give power to the Department to achieve the object of upsetting the finding of the Collector (Appeals) and the Tribunal in this manner.
In view of our finding as mentioned above we need not give our views on the other points raised by the parties including case law cited before us. The impugned order is set aside and the Appeal is allowed with consequential relief.