SCN to Dummy Unit - A Catch-22 Situation!
SHOW Cause Notice to a dummy unit was always a tricky issue for the Central Excise officials. It happens mostly in cases of clubbing of clearances of SSI units. Suppose there are two Companies, A1 and A2, both manufacturers, both registered, both having a factory each and both managed independently. But the Department knows that the creation of two units is only to avoid excise duty. There is actually only one Company and the second one is a dummy. Suppose the Department decides that A1 is the Company and A2 is the dummy, who should they issue the notice to?
If they issue the notices to both A1 and A2, it proves the existence of two independent Companies capable of replying to the department.
If they issue the notice only to A1, thenA2 can claim that it is an independent Company and was not a party to the litigation and the order passed against A1 is not applicable to it.
Damned if you do and damned if you don't!
We bring you one such case today. Please see Breaking News.
Until Tomorrow with more DDT
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