Custom, Excise & Service Tax Tribunal
C.C.E., Ludhiana vs M/S. Aron Mechnalical Works on 10 February, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 10.02.2014
For Approval &Signature :
Honble Mrs. Archana Wadhwa, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No. E/2915-2916/2007 -EX[SM]
[Arising out of Order-in-Appeal Nos.226-227/ST/Appl./Jal/2007, dated 10.08.2007 passed by C.C.E.(Appeals), Jalandhar (HQrs. at Chandigarh)]
C.C.E., Ludhiana Appellants
Vs.
M/s. Jagatjit Agro Industries
M/s. Aron Mechnalical Works Respondents
Appearance Shri RK Mishra, DR - for the appellants Shri Vikrant Kackria, Advoate - for the respondent CORAM: Honble Mrs. Archana Wadhwa, Member (Judicial) Final Order No._50435-50436_, dated 10.02.2014 Per Honble Mrs. Archana Wadhwa :
Being aggrieved with the order passed by the Commissioner (Appeals), Revenue has filed the present appeals. Both the appeals are being disposed of by a common order as they arise out of the same impugned order. I have heard Shri RK Mishra, Ld. Departmental Representative appearing for Revenue and Shri Vikrant Kackria, Ld. Advocate, appearing for the respondents.
2. As per facts on record, M/s. Saron Mechanical Works is a proprietary unit of Shri Dharam Singh, established since 1994 and engaged in the manufacture of boring machines falling under Sub-heading No.8430.00 of the Schedule to the Central Excise Tariff Act, 1985 along with exempted goods of agricultural equipment like reaper, etc. The other unit M/s. Jagatjit Agro Industries was established in 2001 under the proprietaryship of Shri Jagatjit Singh, son of Shri Dharam Singh.
3. Their factory was visited by Central Excise officers on 10.06.2003 and various checks and verifications were conducted. Some loose slips were found indicating some clearances. The Revenue also entertained a view that since both the units were located in the same plot and were using electric connection from Punjab State Electricity Board and were storing raw-materials in one common place, the clearances of both the units are required to be clubbed. Proceedings were initiated resulting in confirmation of demand against M/s. Jagatjit Agro Industries to the tune of Rs.17,37,954/- (Rupees seventeen thousand thirty seven thousand nine hundred and fifty four only) on th ground that the total clearances of both the units have exceeded the amount of Rs.1 crore. In addition, penalty of identical amount was imposed upon both the units.
4. On appeal against the above order, Commissioner (Appeals) held in favour of the assessees on the ground that without declaring M/s. Saron Mechanical Works as a dummy unit, how their clearances can be clubbed with the clearances of M/s. Jagatjit Agro Industries.
5. After hearing both the sides, I find that admittedly M/s. Saron Mechanical Works was established in 1994. The same cannot be held a dummy unit of M/s. Jagatjit Agro Industries, which was established in 2001. A unit which was already working for almost six to seven years cannot be held to be a dummy unit, which is yet to be come into existence.
Otherwise also, I find that it is not the Revenues case that both the units are not having complete machinery so as to manufacture the goods in question. Merely because a common electricity connection was used by both the units by itself will not make it a dummy of one another. Similarly, a common accountant or a common store room for raw-materials cannot be held to be a reason for clubbing the clearances of both the units established when there is no dispute about both the units being complete in themselves and manufacturing goods independently of each other.
6. In view of the foregoing reasons, the Revenues appeals are rejected.
(Dictated and pronounced in the Open Court) (Archana Wadhwa) Member (Judicial) SSK -4-