Vindhya Cast Coaters Ltd. Vs. Commissioner of Central Excise

Vindhya Cast Coaters Ltd. vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Jul 25, 2006

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Citation: sooperkanoon.com/43211
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: K Kumar, a T K.K.
Decided On: Jul 25, 2006
Subject: Land Acquisition

Case Summary

AI-generated summary - not the official court judgment text.

Land Acquisition

Key legal issue: Land Acquisition

Parties & Advocates

Appellant / Petitioner

Vindhya Cast Coaters Ltd.

Respondent

Commissioner of Central Excise

Legal References

Reported In: (2006)(110)ECC469

Excerpt

.....provided under notification no. 85/85 dated march 17, 1985 which read as follows: 2. nothing contained in this notification shall apply if the aggregate value of clearances of all excisable goods for home consumption.- (a) by or on behalf of a manufacturer, from one or more factories, or (b) from any factory, by or on behalf of one or more manufacturers, had exceeded rupees seventy-five lakhs in the preceding financial year.this notification was subsequently amended and the condition prescribed in the subsequent notification is that "where the manufacturer clears specified goods from one or more factories the exemption on such goods shall apply to aggregate value of clearance of all the factories together." the words "by or on behalf of the manufacturer." are no longer there. attention was also invited to the cegat decision in the case of nutrine sweets pvt. ltd. v. commissioner of central excise, tirupathi 2005 (192) e.l.t. 486 (tri.-bang.) wherein it was held that mere fact of an appellant being subsidiary unit cannot be a ground for clubbing clearances as they are independently incorporated and no flowback of funds or mutuality of interest shown. it was observed that the supreme court decision in the case of gammon far chems ltd. was not applicable as it related to the notification 85/85 when the wordings were different. a similar view was taken in the case of catalco chemicals pvt. ltd. v. commissioner of central excise, surat-i where tribunal vide order no. a/677/wzb/06/c-i/eb dated 29.03.2006 held that notification 175/86 & 1/93 do not contain any condition contained in notification no. 85/85 and therefore the clearance of a subsidiary unit cannot be clubbed with that of the holding company for the purpose of determining the eligibility to excise exemption. the department's contention that there was a mutuality of interest between the appellant and holding company and therefore the clearances were to be clubbed was also rejected as it was held that in.....

Full Judgment

1. The appellants are engaged in manufacture of coated papers and paper boards. They are subsidiary of M/s Shree Vindhya Paper Mills Ltd. but hold approx 99% share capital of the appellants. The remaining share capital is owned by promoters and their relatives. The appellants were availing benefit of SSI exemption Notification 9/99 dated 28.02.19999 and 9/2000 dated 01.03.2000. They were however issued show cause notice proposing to deny SSI exemption on the grounds that the turn over of both the companies exceeds the exemption limit, and therefore they were not eligible for SSI exemption. They were issued 7 show cause notices seeking to demand duty amounting to Rs. 23,14,689/- for the period April 1999 to June 2003. The show cause notices were confirmed by the Assistant Commissioner who also imposed a penalty of Rs. 2 Lakhs and demanded interest on the duty not paid. This order was upheld by the Commissioner (Appeals) who relied upon the decision of the Supreme Court in the case of Collector of Central Excise, Banglore v. Gammon Far Chems Ltd. 2. The learned advocate for the appellants submitted that the clearance of the two companies have been clubbed merely because the appellants were subsidiary company relying upon the decision of the Supreme Court in the Gammon Far Chems Ltd. case (cited supra). It was submitted that the Gammon Far case related to exemption provided under Notification No. 85/85 dated March 17, 1985 which read as follows: 2. Nothing contained in this notification shall apply if the aggregate value of clearances of all excisable goods for home consumption.- (a) by or on behalf of a manufacturer, from one or more factories, or (b) from any factory, by or on behalf of one or more manufacturers, had exceeded rupees seventy-five lakhs in the preceding financial year.

This notification was subsequently amended and the condition prescribed in the subsequent notification is that "where the manufacturer clears specified goods from one or more factories the exemption on such goods shall apply to aggregate value of clearance of all the factories together." The words "by or on behalf of the manufacturer." are no longer there. Attention was also invited to the CEGAT decision in the case of Nutrine Sweets Pvt. Ltd. v. Commissioner of Central Excise, Tirupathi 2005 (192) E.L.T. 486 (Tri.-Bang.) wherein it was held that mere fact of an appellant being subsidiary unit cannot be a ground for clubbing clearances as they are independently incorporated and no flowback of funds or mutuality of interest shown. It was observed that the Supreme Court decision in the case of Gammon Far Chems Ltd. was not applicable as it related to the Notification 85/85 when the wordings were different. A similar view was taken in the case of Catalco Chemicals Pvt. Ltd. v. Commissioner of Central Excise, Surat-I where Tribunal vide Order No. A/677/WZB/06/C-I/EB dated 29.03.2006 held that Notification 175/86 & 1/93 do not contain any condition contained in Notification No. 85/85 and therefore the clearance of a subsidiary unit cannot be clubbed with that of the holding company for the purpose of determining the eligibility to excise exemption. The department's contention that there was a mutuality of interest between the appellant and holding company and therefore the clearances were to be clubbed was also rejected as it was held that in that case the duty should have been demanded from the holding company and not from subsidiary company.

3. The learned S.D.R. Shri Uma Shankar however submitted that the case was squarely covered by the Supreme Court decision in Gammon case and further observed that the two units were having a common balance sheet and were having a mutuality of interest between the two.

4. We have considered the submissions. We find that the appellants' case is squarely covered by the Tribunal decision in the case of Nutrine Sweets Pvt. Ltd. and Catalco Chemicals Pvt. Ltd. cited supra.

We accordingly follow the same and allow the appeals and set aside the order of the Commissioner (Appeals).

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Vindhya Cast Coaters Ltd. vs Commissioner of Central Excise Same Subject Land Acquisition Same Judge K Kumar, a T K.K.