RAO INDUSTRIES Vs. COMMISSIONER OF C. EX., BANGALORE

JUDGEMENT

(1.) THESE appeals have been filed against Order -in -Appeal No 129/2002, dated 8 -3 -2002 passed by the Commissioner of Central Excise (Appeals) Bangalore.

(2.) THE brief facts are as follows : After investigation, it appeared to Revenue that M/s. Rao Industries and M/s. Rao Trailers should be considered as only one unit for the purposes of SSI Exemption. There were other violations of Central Excise Act such as under -valuation, clandestine removal and also manipulation of records. Both the units have common partners. They are in the same premises. They have common infrastructure. One Shri H.P. Shashidhar Rao, a partner in both the units managed the entire show. In respect of trailers manufactured by one unit, payment has been obtained by the other unit. It has also been found out that in order to reduce the value of clearances in the invoices in many cases, the appellants indicated the sale of chassis assembly in the invoices while records procured from the banks indicated the sale of complete trailers. Lot of evidence had been unearthed in respect of clandestine clearances. The Original Authority confirmed a duty demand of Rs. 11,64,836/ - in respect of the appellant for the period from 1994 to 1999. Equal penalty was imposed. A penalty of Rs. 2 lakhs was imposed on Shri H.P. Shashidhar Rao under Rule 209A of the Central Excise Rules, 1944. Interest under 11AB was also demanded. The appellants approached the Commissioner (Appeals). The Commissioner (Appeals) upheld the clubbing of the clearances of the two units for the purpose of SSI exemption. As regards mandatory penalty, he has held that penalty equivalent to duty evaded for period subsequent to 28 -9 -96 can only be imposed under Section 11AC. He reduced the penalty on Shri Shashidhar Rao to Rs. 25,000/ -. The appellants have come before this Tribunal challenging the Order -in -Appeal.

(3.) THE appellants made the following submissions.