ORDER
S.S. Rang, Member (J)
1. Heard both sides.
2. The appellants filed these appeals under a common adjudication Order dated 31.10.2003 passed by the Commissioner of Central Excise, Vadodara. The demand is confirmed on the ground that the appellant M/s Unicure Remedies P. Ltd. are selling their whole production of ‘Vital-Z’ to their related Person Redkine Pharmaceuticals Pvt. Ltd. at a lower price with intent to evade payment of duty. The demand was also confirmed on the ground that M/s Unicure Remedies Pvt. Ltd. cleared their product without payment of duty. The benefit of small scale exemption notification was denied to M/s Helviina Pharmaceuticals Pvt. Ltd. on the ground that in fact this unit was also of M/s Unicure Remedies P. Ltd.
3. In respect of allegation of clandestine removal that appellant cleared all of their product ‘Vital-Z’ cleared to M/s. Redkine Pharmaceuticals Pvt. Ltd., their contention is that before the adjudicating authority the appellant has specifically pleaded that they were not clearing all of their goods to M/s Redkine Pharmaceuticals Pvt. Ltd. but they were clearing ‘vital-Z’ to S.K. Parma, Agra, Akshay Enterprise, Chandigarh and Sabita Enterprises, Berhampur almost at the same price. This plea of the appellant was not considered by the adjudicating authority. In respect of clandestine removal the contention of the appellant is that they produced to detailed chart showing correlation in respect of the goods cleared on proforma invoice/delivery challans with the invoice whereby duty was paid, the adjudicating without considering the data supplied by the appellant held that this correlation was not shown to the investigating team. The contention of the appellant is that all the record was taken in possession by the revenue authorities at the time of visit by them and his correlation was made after getting copies of the document of the revenue.
4. In respect of the clubbing of clearance and denial of small scale exemption notification to M/s Helviina Pharmaceuticals Pvt. Ltd., the contention of the appellant is that both M/s. Helviina Pharmaceuticals Pvt. Ltd. and M/s. Unicure Remedies Pvt. Ltd. are private limited companies and only two Directors were common. There was no mutuality of interest between the two Private Limited companies. The appellants relied upon the Board’s Circular No. 6/92 dated 29.5.92 wherein it was clarified that each limited company is a manufacturer by itself and well be entitled to a separate exemption limit provided under small scale exemption notification.
5. Learned SDR appearing on behalf of Revenue after relying upon the findings of the adjudicating authority submitted that demand was rightly confirmed.
6. We find that the allegation against M/s Unicure Remedies Pvt. Ltd. are that they were clearing whole production of Vital -Z to one related company M/s Redkine Pharmaceuticals Pvt. Ltd. at a lower price to evade payment of duty. In reply to the Show-cause Notice, appellants specifically mentioned that they were also clearing the same product to other dealers almost at the same price. This fact was not considered by the adjudicating authority while confirming the demand. In respect of clandestine removal also the appellant produced a detailed chart showing a correlation in respect of the goods cleared on proforma invoice/delivery challans. This was also brushed aside by the adjudicating authority saying that this correlation was not shown to the investigating officers. When the evidence was produced by the assessee on the basis of statutory records, the adjudicating authority should have gone into. In these circumstances, we find that these two issues need re-consideration by the adjudicating authority. The impugned order confirming the duty and imposing penalties in respect of these issues is set aside and the matter is remanded to the adjudicating authority for deciding afresh after affording an opportunity to the appellants. In respect of the denial of the benefit of small scale exemption notification to M/s. Helviina Pharmaceuticals Pvt. Ltd. we find that M/s Unicure Remedies Pvt. Ltd. and M/s Helviina Pharmaceuticals Pvt. are private limited companies and only two Directors were common and there was no evidence to show the financial flow back. We find that the Board vide its Circular dated 29.5.92 clarified that when the benefit of small scale exemption notification is available to the each limited company as each company is a manufacturer by itself will be entitled to a separate exemption limit. In view of the settled law, two private limited companies cannot be held to be related persons. In the absence of any financial flow back, the denial of benefit of small scale exemption notification to M/s Helviina Pharmaceuticals Pvt. Ltd. is not sustainable. Hence, the impugned Order in this aspect is set aside the appeal filed by M/s Helviina Pharmaceuticals Pvt. Ltd. is allowed.
7. The appeals are disposed of as indicated above.