C C INDUSTRIES Vs. H N RAY

JUDGEMENT

(1.) By this petition, the petitioners seek an appropriate writ for setting aside the orders dated 4th September, 1965, 7th November, 1971 and 6th August, 1975 passed by the Officer on Special Duty, Central Excise, Bombay, the Appellate Authority and the Revisional Authority, respectively.

(2.) The case of the petitioners in the petition is that the 1st petitioner purchased certain lands at Udhna on which it constructed industrial sheds and let each of these sheds to petitioners 2 to 6 who carry on business of manufacturing cotton fabrics on power-looms at Udhna. The 1st petitioner is a partnership firm which came into existence from 1st February, 1960 at Udyog Nagar, Udhna, District Surat, and has 4 pirn winding machines at Udhna. The 2nd petitioner carries on business as the sole proprietor in the name and style of M/s. Prithvi Textiles from November 1960 and is the owner of 8 powerlooms at Udhna. The 3rd petitioner carries on business in the name and style of M/s. Dilip Textiles as the sole proprietor since March 1961 and owns 9 power-looms at Udhna. The 4th petitioner carries on business in the name and style of M/s. Kirti Textiles as the sole proprietor since March 1961 and owns 6 power-looms at Udhna. The 5th petitioner carries on business in the name and style of M/s. Shree Raj Textiles as the sole proprietor since March/April 1961 and initially owned 6 power-looms. Out of these, two were sealed by the Central Excise authorities in 1962, with the result that 4 power-looms are working in the shed of the 5th petitioner. The 6th petitioner carries on business in the name and style of M/s. Deepak Weaving Factory, as the sole proprietor, which initially owned 6 power-looms, two of which were sealed by the Central Excise authorities in about April 1962, with the result that 4 power-looms are in use. On 23rd May, 1964, a partnership firm of M/s. Shantikumar Dhairyawan & Co. was formed wherein the 2nd petitioner, one Dhairyawan Ramdas Asher and the 4th petitioner were partners, for the purpose of distribution of 70% of the production of petitioners 2 to 6. From time to time petitioners 2 to 6 applied for permission for special procedure under the Excise Rules and were separately granted permission and separate licences were issued to them by the Excise authorities. Petitioners 2 to 6 have been separately assessed and have separately paid their respective duty from 1961 to December 1964 to the Excise authorities at Surat.

(3.) In about July 1964, the Central Excise authorities at Surat instituted an enquiry into the working of petitioners 2 to 6 whether they were working as one unit or were separate units. The result of the enquiry was then inconclusive. However, 5 months later, namely, on 21st December, 1964, the Central Excise authorities (namely Assistant Collector Rangwani working under the Collectorate of Bombay), seized account books and other documents from the 1st petitioner's Head Office at Bombay and from the Bombay residence of the 2nd petitioner. Among the papers seized in the course of this raid were loose sheets containing calculations and other data and common balance sheets. On 24th December, 1964, the 2nd petitioner's statement was recorded by the Excise authorities. On 26th December 1964, the Excise authorities recorded the statement of the 3rd petitioner, the 2nd petitioner (on behalf of his further, viz., the 6th petitioner), and the 4th petitioner. On 5th January, 1965, the statement of the partner of the 1st petitioner and the statement of the 5th petitioner were recorded. These statements were inculpatory in nature and contained admissions that all these units were run not individually by the petitioners but as one unit.