2025-VIL-692-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Small Scale Industry (SSI) benefit, Dummy companies, Clubbing of clearances - The Appellant are in appeal against an order of the Commissioner which confirmed the demand of duty and imposed penalty on them. The Department alleged that the Appellant had floated certain dummy companies and was availing SSI benefit under Notification No. 175/1986-CE in respect of clearances made by these 8 companies. The matter went through various stages of adjudication and appeal before the Tribunal - Whether the 8 companies who claimed SSI benefit were dummy units of the Appellant and therefore, their clearances were required to be clubbed together for denial of the benefit under SSI scheme under Notification No. 175/1986-CE or otherwise - HELD - Some of the grounds taken by the Appellant have merit, as the demand against the co-noticees (8 companies) which was earlier dropped, did not participate in the de novo proceedings on the assumption that they were not party to the remand proceedings. However, the evidence in relation to these 8 companies was taken into account while deciding the case against the Appellant, and penalty was also imposed on them - The Adjudicating Authority was not debarred from proceeding with the matter in relation to the 8 co-noticees also, as the Tribunal's earlier order had remanded the entire matter for de novo adjudication - The Adjudicating Authority had considered various factors, including financial involvement, to holistically conclude that these 8 firms were dummy firms and therefore, clubbing of their clearances was justified - However, in the interest of justice, the Adjudicating Authority to give fresh notice of hearing to the Appellant as well as all the co-noticees, and allow them to participate and provide evidence in their support - The Adjudicating Authority to consider the observations made by the Tribunal in its earlier order while deciding the matter - The appeals are disposed of
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