ORDER
Jyoti Balasundaram, Member (J)
1. On 12.3.91, officers of Central Excise (Prev.) visited the premises of the appellant (herein after referred to as GEI) and M/s. Girish Ego Control (herein after referred to as GEC). In GEI Shri Shrichand J.Lilani is the proprietor while in GEC he is the Karta of the HUF. M/s. GEI manufacturing various types of electrical heaters while GEC is manufacturing. Thermostats and cutouts. The officers noticed that the production and operating activities of both the units are looked after by the son of Mr. S.L. Lilani and also by Smt. K.S. Lilani wife of S.J. Lilani sale of finished goods and purchase of raw materials of both the units are looked after by Shri S.J. Lilani; staff is being paid jointly by both the units; units are interconnected by an emergency door; a common brand name viz. “Girish EGO” is used by both the units for their products and at the time of visit of the officer, it was noticed that spray painting on heaters has being done in the premises of M/s. GEC. The officers also visited the other unit viz. M/s. EGO Therm (India) of which Shri A.S. Lilani (son of Shri S.J. Lilani) is the proprietor. Show cause notice dated 10.2.91 was issued on the ground that GEC and M/s. EGO Therm (India) has been created by M/s. GEI only for the purpose of camouflaging the production of M/s. GEI in order that M/s. GEI can wrongly avail exemption under Notification 175/86 dated 1.3.86. The notice proposed recovery of duty of Rs. 1,63,373.30 as well as penal action. The notice was adjudicated by the Commissioner who held that the value of the clearances of M/s. GEI and M/s. GEC can be clubbed for the purpose of exemption under Notification 175/86, set aside the allegation that EGO Therm (India) was a dummy unit of GEI and accordingly confirmed a demand of Rs. 55,233.30 and imposed penalty of Rs. 25,000/- on GEI. Hence this appeal.
2. We have heard both sides. We find that the clearance of GEI and GEC have been clubbed only on the ground that the Karta of the H.U.F. of GEC viz. Shri S.J.Lilani is also the proprietor of GEI and the existence of identity of common proprietary interest is sufficient for the purpose of clubbing the clearances of these units. However, this is not sufficient for ho,ding that there is a common proprietary interest, in the light of the Tribunal’s order in the case of Jindal Electrical Vs. CCE, Chandigarh (2003-TAXINDIAONLINE-228-CESTAT-DEL) where the Tribunal has held that clearances of a unit owned by as assessee in his individual capacity cannot be clubbed with clearances of another unit owned by HUF of which the assessee is the karta.We also note that factors such as use of common brand names, use of common office premises etc. which were common to all three units have been held not to be sufficient for the purpose of establishing common proprietary interest between M/s. GEI and EGO Therm (India). What is required for the purpose of treating GEI and GEC as one unit whose clearances could be clubbed for the purpose of determining eligibility to SSI benefit is, establishing that they have financial flow back and both units have interest in each others business, which is missing in the present case.
3. In the light of the Tribunal’s order in the case of Jindal Electricals supra we hold that the value of clearances of GEI and GEC cannot be clubbed together for the purpose of denial of exemption under Notification 175/86, set aside the impugned order and allow the appeal.