COMMISSIONER OF CENTRAL EXCISE Vs. SARON MECHANICAL WORKS

JUDGEMENT

(1.) This order shall dispose of CEA Nos.2 and 3 of 2015 as learned counsel for the parties are agreed that the issues involved in both the appeals are common. However, the facts are being extracted from CEA No.2 of 2015.

(2.) Cea No.2 of 2015 has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (in short, "the 1944 Act") against the order dated 10.8.2007, Annexure A.3 passed by the Commissioner (Appeals) and order dated 10.2.2014, Annexure A.4 passed by the Customs, Central Excise and Services Tax Appellate Tribunal, New Delhi (in short, "the Tribunal") in Appeal No.2916/07, claiming following substantial questions of law:-

(3.) A few facts relevant for the decision of the controversy involved as narrated in CEA No.2 of 2015 may be noticed. On 10.6.2003, the Central Excise Preventive Officers, Ludhiana searched the factory premises of M/s Jagatjit Agro Industries on the strength of search warrants issued by the competent authority. It was found engaged in manufacturing of boring machines falling under sub head No.8430.00 of the Schedule to the Central Excise Tariff Act, 1985 (in short, "the 1985 Act") and exempted goods of agricultural equipment like reaper etc. It was not registered with the Central Excise department and was availing the benefit of duty exemption applicable to SSI unit in view of notification dated 1.3.2003. During search, it was found that the respondent M/s Saron Mechanical works and M/s Jagatjit Agro Industries jointly had crossed the duty exemption limit of Rs. 1 crore and were clearing the dutiable goods without payment of appropriate Central Excise duty without obtaining Central Excise registration as required under section 6 of 1944 Act read with Rule 9 of the Central Excise Rules, 2002 (in short, "the 2002 Rules"). Consequently, show cause notice dated 5.1.2006 was served upon both the respondents proposing Central excise duty demand by clubbing their clearances. The adjudicating authority vide order dated 7.8.2006 confirmed the demand of duty amounting to Rs. 17,37,954/- by clubbing the sale of both the respondents alongwith interest and penalty of the equal amount of Rs. 17,37,954/- on M/s Jagatjit Agro Industries. Similar amount besides penalty was imposed upon M/s Saron Mechanical Works. Aggrieved by the order, both the respondents preferred their separate appeals before the Commissioner (Appeals) who vide order dated 10.8.2007, Annexure A.3 allowed the appeals and set aside the order dated 7.8.2006. Not satisfied with the order, the department filed appeal before the Tribunal. Vide order dated 10.2.2014, Annexure A.4, the Tribunal dismissed the appeal holding that units of both the respondents were separate to each other as M/s Saron Mechanical works was working since the year 1994 whereas M/s Jagatjit Agro Industries had started working in the year 2001. Hence the instant appeals by the revenue.