- (1.) This is a Tax Case under Section 35H(1) of the Central Excise Act, 1944. Following are the grounds of reference : a) Hon'ble CEGAT appears to have not appreciated that M/s Xenon has a separate identity as a manufacturer of goods and have camouflaging their identity as a facade unit with sole purpose to irregularly avail SSI exemption with intent to evade payment of Duty on goods manufactured and cleared by their own registered premises. b) The Hon'ble CEGAT has erred by not appreciating that M/s Xenon is a facade for the purpose of Notfn. No.175/86-CE only which can not extinguish their liability to observe Central Excise provisions. c) Hon'ble CEGAT appears to have not appreciated that the decision of the Hon'ble Supreme Court reported in 1997(92) ELT451 relates and restricts to liability to pay the Duty demanded. It will be appropriate to take note of the fact stated in the Reference Application itself, which are as under :
(2.) M/s Xenon, Adityapur, Jamshedpur (hereinafter referred to as the said assessee) is a partnership firm and are engaged in the manufacturing of Motor Vehicles Parts falling under Chapter heading no.87.08 of the CETA'85, as per the specifications of M/s TELCO Ltd., Jamshedpur. The assessee is availing the SSI exemption in terms of the Norfn. No.175/86-CE dt. 01.03.86 (as amended). The factory of the assessee is adjacent to the M/s Samarth Engg. Co Pvt. Ltd., Adityapur, Jamshedpur (hereinafter referred to as M/s SECO) who is also availing SSI exemption under 175/86-CE dt. 01.03.86 (as amended) and manufacturing the same goods that the assessee is manufacturing.
(3.) On visit of the factory premises by the officers of the Preventive unit of Central Excise Commissionerate, Jamshedpur it was found that the unit of the assessee was formed by dubiously and artificially fragmenting M/s SECO with a view to misutilize the benefits of aforesaid SSI exemption notification.;