The court emphasized the importance of protecting the interest of the Revenue while ensuring the appellant's right to be heard and press their appeal.

SANJIV KHANNA, J.

CM No.1023/2011

This is an application for condonation of delay of 105 days in filing the appeal under Section 35G of the Central Excise Act, 1944. In the appeal the appellant has impugned two orders passed by the Customs, Excise and Service Tax Appellate Tribunal dated 14.3.2011 and 10.10.2011. Order dated 10.10.2011 was passed on an application for modification/rectification. It is stated that as the rectification application was pending consideration before the Tribunal, there has been delay in preferring the present appeal.

2. Mr. Satish Kumar, Advocate who appears for the Central Excise has been heard on this application for condonation of delay. He waives right to file reply.

3. Considering the facts and the reasons given, we allow the present application and the delay in filing the appeal is condoned.

4. Application is disposed of.

CEAC 1/2012

1. A limited issue arises for consideration and therefore we have heard the counsel for the appellant and the respondent. The following substantial question of law is framed:-“Whether the Customs, Excise and Service Tax Appellate Tribunal is right in directing the appellant to deposit Rs.70 lakhs as a pre-condition for hearing of the appeal vide order dated 28.3.2011?”

2. The appellant herein is a partnership firm of two brothers Joginder Kumar Talwar and Sanjeev Kumar Talwar. They are engaged in manufacture of lay-flat-tubing, plastic bags, fillers and master batches in their factory at 364A, Hastasal Industrial Area, Delhi. There was another factory located in plot No. 24 khasra No.107/1 Hastasal Village, Uttam Nagar, Delhi. The case of the appellant is that this second factory is the manufacturing unit of another partnership firm M/s. Himalayan Polycolours of which Neelam Talwar and Rimi Talwar are partners. Neelam Talwar is the wife of Joginder Kumar Talwar and Rimi Talwar is the wife of Sanjeev Kumar Talwar. On 11.12.2007 a search was conducted in the premises of Himgiri Plastics. Subsequently, search was also conducted on the premises of Himalayan Polycolours on the same day. Thereafter, show cause notice was issued to the appellant herein. It was alleged in the show cause notice that the entire production of the partnership firm M/s. Himalayan Polycolours was required to be clubbed with the production carried out by the appellant. The second allegation made in the show cause notice was that there was clandestine removal of manufactured goods and the appellant and M/s. Himalayan Polycolours had incorrectly under declared their production.

3. The appellant herein filed a detailed reply to the show cause notice raising several contentions. It was submitted that the so-called exercise copy found during the search was a production diary and did not reflect sales of additional production which was removed clandestinely. The exercise book contained details of production which were also duly recorded in the books of account maintained on regular basis. With regard to the first allegation it was submitted that the two partnership firms are independent entities, manufacturing different products and clubbing of production of the two separate entities was not permissible without financial flow back or common administration. Mere relationship of the partners of the two firms, cannot be a ground to club their production.

4. Commissioner vide order dated 13.9.2009 rejected the contentions of the appellant and held that the production of the two units i.e. Himgiri Plastics and M/s. Himalayan Polycolours should be clubbed. He also computed the clandestine sales with reference to the excise book. He held that the figures mentioned in the excise book have to be added to the figures of the actual production recorded in the regular books. This has created the demand of Rs.1,28,26,111/-for the period 2003-04 to 2007-08. The appellant was also liable to an equal amount towards penalty and pay interest. In addition personal penalty of Rs.1,30,000/-each has been imposed