RENU TANDON Vs. UNION OF INDIA

JUDGEMENT

(1.) AS per the facts mentioned in the writ petition, the petitioner is the sole owner of an industrial unit situated at A -14 -A, Industrial Estate, 22 Godown, Jaipur, engaged in the manufacture of copper wire from ingots of wires of higher gauge to thinner gauges. Wire drawing machines were installed in the month of August, 1989 when the Unit was established. The petitioner filed an application before the Joint Director, Industries Deptt. Jaipur and obtained provisional registration certificate dated 30th May, 1989 (Annexure -1). The petitioner took on rent a portion of an industrial shed owned by M/s. Tandon Brothers on a monthly rent of Rs. 715/ -, vide rent note (Annexure -2) which was duly approved by the Rajasthan Industrial and Development Investment Corporation Limited, Jaipur (hereinafter referred to as the 'RICCO'), on 11 -10 -1989. Thereafter, the petitioner filed an application before the Supdt, Central Excise on 15 -9 -1989 for the grant of licence to manufacture copper wire of thickness as mentioned in the Schedule appended to the application which showed the address of the petitioner's unit as 'A -14 -A, 22 Godown, Jaipur.' The site was inspected and after a thorough enquiry, a licence (Annexure -4) was issued under Rules 174 and 178 of the Central Excise Rules, 1944 (hereinafter referred to as the 'Rules of 1944') wherein also, the location of the unit was specifically mentioned as 'A -14 -A, Industrial Estate, 22 Godown, Jaipur'. The petitioner also applied for electric connection on 23 -9 -1989 to the Rajasthan State Electricity Board for giving a separate electric connection, which was allowed and a sanction letter was issued on 15 -12 -1989 but the connection could not be given and therefore, arrangements had been made by the neighbour for the consumption of electricity, by the unit of the petitioner. A sub -meter had been installed in the premises. The manufacturing process started from September, 1989 and the return in Form RT -12 was sent to the Supdt. Central Excise Deptt. in triplicate on 7 -10 -1989. One copy was returned to the petitioner after verification, one copy was retained by the Supdt. Central Excise and the third copy was sent to the Assistant Collector, Divisional Office of the Central Excise Department. Similar returns were filed every month and the last statement was sent on 7 -8 -1990. The petitioner also opened a bank account in the name of the unit, in the State Bank of Tranvancore, M.I. Road, Jaipur, to be operated by her alone. The said bank sanctioned the limits as well - Cash Credit hypothecation and bills discount. To avoid frequent visit to the Excise Department, the petitioner has given Power of Attorney to her husband Shri Avinash Tandon. For Small Scale Industries the excise rate on goods manufactured upto the value of Rs. 75 lacs is 10% and beyond this limit, the excise duty is levied at the rate of 20%. The petitioner had manufactured goods worth Rs. 45,08,151.74 in the year ending on 31 -3 -1990 whereas the turn -over from 1 -4 -1990 to 2 -9 -1990 was less than Rs. 30 lacs and therefore, her manufacturing limit being less than Rs. 75 lacs, she was required to pay excise duty only @ 10%. On 29th August, 1990, the petitioner received a notice (Annexure 8) to show cause as to why the classification list effective from 1 -4 -1990 should not be approved taking into consideration the value of clearance of both the Units M/s. Mani Sales and M/s. Tandon Brothers, as clubbed together giving various grounds therein. It is against this show cause notice that the present writ petition has been filed by the petitioner on 13 -9 -1990, praying that the show cause notice be quashed and if not the whole notice, then, para 6 of the notice demanding execution of bond and the security bond be quashed.

(2.) THE writ petition was admitted on 13 -9 -1990 and notices were ordered to be issued to the respondents. On the stay petition, it was ordered that in the meanwhile, the petitioner shall deposit excise duty at the rate of 10% as she was doing earlier. As regards para No. 6 of the notice (Annexure -8), it was directed that the petitioner may file only bond B -13 equal to differential duty as mentioned in Annexure -8 and she will not be required to produce any security.

(3.) ON merits, it has been submitted that both the units - M/s. Mani Sales and M/s. Tandon Brothers are situated at A -14, Industrial Estate, 22 Godown, Jaipur. They have common electric connection and the relation between the two concerns is so close that both the concerns belong to the same family. It is only a method of reducing one's liability to pay excise duty that the manufacture is being done in two units. The petitioner is using the same premises, management, office, labour and electric connection of M/s. Tandon Brothers.