Clearance of two entities having same partners is to be clubbed for SSI exemption limit

Himalaya Equipments Vs C.C.E. & S.T. (CESTAT Ahmedabad)

CESTAT Ahmedabad held that value of clearance of two entities having same partners are to be clubbed and excise duty on clearance exceeding the eligible limit of SSI exemption is duly payable.

Facts- This appeal is directed against Order-In-Original passed by the Commissioner Central Excise, Ahmedabad-III whereby, the differential demand of Central Excise Duty confirmed against M/s. Himalaya Equipments on the ground that one other unit M/s. Himalaya Engineers and Manufactures having same partners of equal sharing, the clearance of M/s. Himalaya Engineers and Manufacturers is required to be included in the value of M/s. Himalaya Equipments and consequently, exceeding the eligible limit of SSI exemption under notification no. 8/2003-CE, the appellant is liable to pay the excise duty. Being aggrieved by the Order-In-Original, the appellant filed the present appeal.

Conclusion- From observation of the learned Commissioner (Appeals) which is based on the circular No. 6/1992- dated 29.05.1992, it is absolutely clear that a firm consisting of certain partners having more than one factory, all these factories should of course be combined. In the said circular, the exception was carved out only in respect of companies on the ground that each company has a separate entity from the share holders. However, in the present case the entities are partnership firms under common partners has to be combined for the purpose of SSI exemption therefore, the judgments relied upon by the learned counsel are of no help to the appellant as the same is on different fact.

We find that in the present case, the appellant have heavily emphasized on the fact that both the factories have separate set up in respect of other aspects therefore, cannot be treated as one. As we stated above, the findings clearly provides that even two different factories of same manufacturer needs to be combined therefore, in the present case the clubbing is not on the basis of the common facility between both the units but because of the common ownership, being same partners in both the firm. Therefore, in our considered view the adjudicating authority has rightly clubbed the value of clearance of both the units and demanded excise duty from M/s. Himalaya Equipments.

Please become a Premium member. If you are already a Premium member, login here to access the full content.