The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the the show cause notice is required to be issued to the Principal Unit And Alleged Dummy Unit.
The bench of Somesh Arora (Judicial Member) various documentary evidences of the other departments/ agencies indicate that the unit of M/s. Mecons was existing at the relevant time and was duly certified by various government agencies. The violation of GIDC agreement, if at all exists, is a matter between GIDC and the appellants.
The appellant has held that M/s Maxocrete Equipments now known as M/s Macons Equipments was engaged in manufacture of Kerb Paver, Road Making Machine, Concrete Mixture Plant, Mobile Concrete Mixture, Spares of Machine Spares of Machine nos. 2 to 4 (TI 8474.90).
Following a visit by the Central Excise Officer, Show-cause Notice dated 16.10.2007 came to be issued on the appellant. Central Excise duty along with interest was demanded and penalty was proposed to be imposed. It was alleged that Central Excise duty in regard to whatever clearances made by another firm viz. M/s Macons Engineers situated at plot no. 37/C/A, Phase-I, GIDC, Vatva, Ahmedabad was required to be demanded from the appellant ie. M/s Maxocrete Equipments. Plot no. 37/C was registered factory premise of M/s Maxocrete Equipments.
The petitioner/assessee has challenged the on the grounds that it is not alleged that the clearance of M/s Macons Engineers are required to be clubbed with the clearances of M/s Maxocrete Equipments (M/s Macons Equipments). Likewise, it is not alleged that M/s Macons Engineers was a dummy unit. Despite this without showing any rhyme and reasons, demand in respect of clearances of M/s Macons Engineers is proposed to be made against M/s Maxocrete Equipments. Same is not sustainable.
The petitioner submitted that even if it is assumed that the case of the department is that M/s Macons Engineers is a dummy unit and therefore, the duty with regard to the clearances made by M/s Macons Engineers is required to be made from M/s Maxocrete Equipments, even in that case, it is a settled law that unless Show-cause Notice is issued to the alleged dummy unit, all proceedings initiated against the principal unit would be vitiated.
The tribunal held that the demand against the Principal unit cannot sustain
Case Details
Case Title: Maxocrete Equipments Versus CGST & Central Excise Ahmedabad South
Case No.: Excise Appeal No. 11128 of 2018
Date: 14.02.2025
Counsel For Appellant: Devashish K Trivedi
Counsel For Respondent: Rajesh K Agarwal
