ARCA Controls Pvt. Ltd. vs Commissioner of Central Excise

The Tribunal found that seven companies namely JNM, SPIREX, CAMBRIDGE, JNMSS, KROHNE, FORBESONS and ARCA are carrying on activities together at the different units by supplying material to each other and the costing department of one Company attends to all the units; that the price structure of one Company is based on norms fixed by the costing department and several such features were noticed by the Tribunal including common funding and financial flow back to a substantial extent though on paper the units appear to be distinct, separate and independent; that these different companies have been established to avail of exemption under Central Excise Act and, therefore, clearances made by these units have been clubbed to hold that these Companies cannot avail of such benefit. A somewhat similar matter came up for consideration before this Court in Supreme Washers (P) Ltd. Vs. The Commissioner of Central Excise, Pune, and connected matters. In one of the Civil appeals it was brought to the notice of this Court that there are two circulars on dated 1-3-1956 and another Circular No. 6/82, dated 29-5-1992 issued by the Central Board of Excise & Customs, New Delhi to the effect that a limited company should be treated as a separate entity for the purpose of exemption limit and the effect thereof had not been considered in those cases as in the present cases also. This aspect of the matter, as to the applicability of the circulars, has not been examined inasmuch as the same had not been brought to the notice of the Tribunal. Therefore, we think it appropriate to set aside the order made by the Tribunal and remit the matter to the Tribunal for fresh consideration in accordance with law. The appeals are allowed accordingly.