Per G.A. Brahma Deva :

These are three appeals filed by the appellants against the common order dated 31.8.1990 passed by the Collector of Central Excise Customs, Pune.

2. The issue relates to clubbing of clearances. According to the department, the above three units are managed by the same family group and accordingly, the duty was demanded on clubbing of clearances.

3. Shri A.C. Jain, learned Advocate, appearing for the appellants in all these cases submitted that apart from duty was demanded on clubbing of clearances, penalty of Rs. 50,000/- was levied on each of the units. He submitted that first two units are independently constituted and third one being an independent partnership concern duly constituted for the purpose of trading activity. He submitted that though partners are related but they are separate and independent units and there was no mutuality of interest among these three units for the purpose of clubbing. He said that Atlas Steel Era was in existence even prior to 1975 and was manufacturing furnitures of steel and other fabricated steels. The other units which are coming into existence after 1975 started manufacturing only of rolling shutters falling under Tariff Item 68. He contended that no evidence was brought on record to show that there was mutuality of interest in between these independent constituents and there was no money flow back. Apart from the merits of the case, he said that demand was also barred by time inasmuch as department was not justified in invoking the larger period. He said that in the instant case the duty was demanded for the period 5.9.1982 to 5.9.1987 under the proviso to Section 11A (1) clubbing the clearance by issuing notice in August, 1987. He said that though there was specific allegation of suppression in relation to the consumption of raw material and manufacture but there was no allegation of suppression with reference to the relationship of the relevant concerns. Referring to the Order-in-original, he drew our attention to the fact that the Collector has dropped the proceedings so far as they relate to the charge of suppression of production and clandestine removal. On the other hand, he said that Collector has dropped against the charge which was specifically alleged in the show cause notice but has given finding with reference to the relationship of the persons of the units which was not alleged in the show cause notice. He contended that since the Collector has dropped the proceedings with reference to the suppression of production, there was no justification for invoking the larger period under the proviso to Section 11A (1) of the Act.

4. On the other hand, Shri S. Kannan countering the arguments submitted that over all contents of the show cause notice have to be taken into consideration and, accordingly, the department was justified in invoking the larger period since sales effected by Atlas Agency was on behalf of M/s. Kwality Steel Works and sufficient evidence was brought on record to show the relationship between the Atlas Agency and the Atlas Steel Era.

5. We have carefully considered the submissions made by both the sides and perused the records. Without going into the merit of the cases, we find that there is sufficient force in the argument advanced on behalf of the appellants on the point of limitation. It is clear from the record that the allegation of suppression was there in the show cause notice with reference to the consumption of raw material and manufacture but the charge was dropped as can be seen in the impugned order. The Collector who adjudicated the proceedings has clearly dropped the proceeding so far as they relate to the suppression of production and clandestine removal. When once these specific charges were dropped with reference to the clandestine removal of the goods, there was no justification for raising demand for invoking the larger period as it was rightly pointed out by the appellant's counsel. In the facts and circumstances, we