COIMBATORE ENGINEERING Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This matter arises before us for the second time. In the initial round we had remanded the matter as the order impugned had jointly levied duty on the real and also the alleged dummy unit. The adjudicating authority had been directed to decide which was the real unit and which was the dummy and to decide the unit liable to pay the duty. The impugned order passed by the Commissioner of Central Excise (Appeals), Coimbatore has affirmed the order of the original authority passed following our remand directions. Adjudicating a Show Cause Notice issued in 13 August, 1991, the original authority demanded excise duty amounting to Rs. 4,25,810/ - from M/s. Coimbatore Engineering Works (CEW) under Rule 9(2) of the Central Excise Rules, 1944 (CER) read with Section 11A of the Central Excise and Salt Act, 1944 (the Act). He imposed a penalty of Rs. 50,000/ - on CEW under Rule 9(2), 52A, 173Q and 226 of the CER and imposed a penalty of Rs. 5000/ - on Smt. Lalithamani under Rule 209A of CER. A penalty of Rs. 1500/ - each was imposed on S/Shri G. Rajendran and D. Udayakumar under Rule 52A and 209A of the CER. In the impugned order the Commissioner (Appeals) rejected the appeal of CEW and allowed the appeal filed by Smt. Lalithamani by vacating the penalty imposed on her.

(2.) Facts of the case in brief are that CEW manufactured limit switches classifiable under Chapter sub -heading 8536.90 in its two units, Unit I (CEW -I) and Unit II (CEW -II). CEW is a partnership firm comprising S/Shri. R. Balasundaram, R. Doraisamy and R. Dhamodaraswamy as partners. CEW -II was registered in the year 1988. M/s. Pneumatic Controls (PC) is an another partnership firm comprising Mrs. B. Lalithamani wife of Shri R. Balasundaram and Mrs. D. Rajaveni wife of Shri R. Doraisamy as partners. PC manufactured limit switches and pressure switches. Limit switches manufactured by CEW were tailor made for M/s. Lakshmi Machine Works, Coimbatore. PC was set up and manufactured excisable goods in the year 1986 -87. In the Show Cause Notice, it was proposed to club the clearances of CEW with those of PC during the years 1987 to 1991 and to determine the SSI exemption admissible to them under Notification No. 175/86 dated 1.3.86.

(3.) In the impugned order, the Commissioner (Appeals) found the presence of the following circumstances, which justified clubbing of the value of clearances of CEW and PC to determine the SSI exemption available to clearances of CEW.