14 December 2012
firm have total turnover of rs. 1 crore of the manuufacturerd units and pvt ltd are trading units of the same finshed products of the same owner having turnover rs. 10 crores ,1.) are firm lible for ssi and 2.)pvt ltd not lible for excise duty
14 December 2012
Pvt Ltd. company is a seperate legal entity and company is liable to pay excise duty as its t/0 exceeds 150 lacs and ssi exemption cannot be avialed since t/o exceeds 400 lacs, however firm can avail ssi exemption if t/o is upto 400 lacs and is not laible to pay excise duty upto 150 lacs of t/o if cenvat does not availed on inputs.
"The department normally denies the benefit of the exemption notification on the ground that one manufacturer wants to split up one unit into various units to take advantage of NIL duty clearances upto Rs.150 lacs in respect of each unit. It is contention of the department that there is considerable revenue loss when such deliberate attempt is made. Therefore, the Department denies the benefit of the exemption notification when they find common directors, share holders,employees, common beneficial interest, etc."
Also the hon'ble Supreme Court in Calcutta Cromotype Ltd. v/s CCE 1998(99) ELT 202 held that the principle of seperate entity is not of universal application & the veil of incorporation can be lifted in fit circumstances to see who is behind the actual operations.
I think the information would be helpful to you.
Further, you have not mentioned whether the co. is engaged in trading of only the goods produced by the firm OR it trades other goods also. That point can be used to argue the officer (In case you decide to treat both entities seperate & get exemption benefit.)
CAclubindia
