KINOTONE Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal has been filed by M/s. Kinotone against the Order -in -Original No. 16/Collector/1992, dated 31 -12 -92 passed by the Collector, Central Excise.

(2.) Briefly stated the facts are that a show cause notice dated 5 -5 -1990 was issued to M/s. Kinotone, M/s. Cine Lamp and M/s. International Talkie Equipment Co. Pvt. Ltd. for demanding Central Excise duty in respect of 269 Cinema Projectors manufactured and removed by M/s. Kinotone under brand name "ITEC" during the period from 1 -4 -85 to 31 -3 -90 from M/s. Kinotone or M/s. International Talkie Equipment Co. Pvt. Ltd. (in short International Talkie), and for imposition of penalty on all these parties and for confiscation of the land, building, plant, machinery, etc. on the ground that all the three parties were inter -linked and inter -connected units. Kinotone were manufacturing/clearing complete cinema projectors by fragmenting/creating one more unit viz. Cine Lamp with a view to avail exemption under Notification No. 85/85 -C.E., dated 17 -3 -85 and Notification No. 175/86 -C.E., dated 1 -3 -86 and that goods were affixed with the Brand name "ITEC" belonging to M/s. Itec Pvt. Ltd. was not eligible for SSI exemption notification. The Collector, under the impugned order, confirmed the demand of Central Excise duty against M/s. Kinotone besides imposing a penalty of Rs. 5 lakh on them under Rule 173Q of the Central Excise Rules, 1944 and confiscating land, building, plant, machinery, etc., within an option to redeem the same on payment of fine of Rs. 50,000/ - and also imposed penalty of Rs. 1 lakh on M/s. International Talkie and Rs. 50,000/ - on M/s. Cine Lamp under Rule 209A of the Central Excise Rules, 1944.

(3.) Shri J.F. Pochkhanawalla, learned Advocate, submitted that Shri Jal Mistry was an employee of the Adalja family for 35 years; that for his loyality, he was made a sleeping partner by Dr. Behari M. Adalja with Mr. Bharat Adalja, his son, in M/s. Kinotone in 1981; that Mistry did not put in his own money nor shared the profit/loss nor was even remunerated in any manner; that Bharat Adalja had taken an irrecovable Power of Attorney from Jal Mistry from the inception of firm; that Bharat Adalja alone, at all times, involved himself in the day to day activity of the business; that after the death of Bharat Adalja in 1989, Pankaj Adalja took a power of attorney in June, 1989 from Jal Mistry who remained as a non -working, non -profit/loss sharing proprietor on paper without any remuneration; that thus technically for the entire period of notice, 1 -4 -85 to 31 -3 -1990, Bharat Adalja was alive and was a partner, except for ten months, from May, 1989 to March, 1990; that hence it was the Adalja family alone who controlled M/s. Kinotone during the entire period on the basis of the Power of Attorney on record; that the Collector also in the impugned order has declared that "the members of the Adalja family have organised systematic scheme aimed at defrauding the Government of its legitimate revenue by dubious means."