TaxTMI 
TaxTMI 
2009 (10) TMI 345
X X X X Extracts X X X X
X X X X Extracts X X X X
....rting goods to Nepal under special procedure meant for Nepal export. They were selling motor vehicle parts for replacement market through four distributors namely, M/s. D.D. Sales Corporation (D.D.S.C. for short), M/s. S.S. Enterprises, M/s. Malhotra Auto & Indl. Corpn. and M/s. Eastern Auto Distributors, Nepal. The dispute relates to sales made through distributors. According to the Department, two of the distributors namely, D.D.S.C. and M/s. S.S. Enterprises were related persons to the appellant-company and they were getting discount of 48% in respect of sales made to them and accordingly, show cause notice was issued proposing to adopt the sale prices of the said distributors to independent parties and proposing demand of duty and impos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....C on the appellant-company. In addition, he imposed penalty of Rs. 40 lakhs each on Shri Rajiv Gambhir and Shri Sanjay Gambhir under Rule 26 of Central Excise Rules, 2001 and Rule 26 of Central Excise Rules, 2002. 4. The learned Advocate for the appellants submits that during the relevant period they were selling through D.D.S.C. They were also selling to distributors based in Nepal to whom the goods were dispatched on payment of duty and the price adopted for such sales after granting 48% discount was also same as the price adopted for sale to D.D.S.C. and therefore, Rule 9 is not attracted. She submits that Section 4 of the Central Excise Act does not refer to clearances for home consumption and therefore, even in respect of export clear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....intention to evade duty should be held against them and demand has to be confined to normal period of limitation and no penalty is imposable on the appellant-company as well as on the appellant-Directors. She also submits that even if sales price of M/s. D.D.S.C. is adopted as the assessable value, the deductions claimed by them in the form of turnover discount and cash discount should have been allowed by the Commissioner. 5. Learned SDR took us through the relevant portions of the order of the Commissioner, and submits that in para 23.1.4 it has been held that the shares of the appellant-company are held only by members of Gambhir family; in para 28.1.8 it has been held that the appellant-company and the marketing firm come under the cat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w of the above, this ground pleaded is not acceptable. 7. Coming to the issue whether D.D.S.C. should be treated as related persons of the appellant-company, we find that the Commissioner has dealt with in details the shareholding of the appellant-company and the partnership firm, the nature of control exercised on the distributing firm by the Directors of the appellant-company. He has also given detailed findings on the mutuality of interest on the business of each other which existed between the appellant-company and the distributing firm. He has also dealt with in detail in paragraphs 23.1 to 23.3.19, the various evidences relied upon by him. He has accordingly come to the conclusion that the appellant-company and the distributor firm a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eserves to be considered. For this purpose, the matter requires to be sent back to the Commissioner for fresh consideration. 9. It is further claimed on behalf of the appellant-company that they have filed declarations dated 28-7-2000 and 17-4-2001 indicating the marketing pattern and particularly mentioning the fact of sales to M/s. D.D. Sales Corporation. They have claimed that 48% trade discount are being allowed to all the distributors uniformly. They have also disclosed that some of the Directors are common in two distributors and prices are same for all the distributors. This factual position has not been rebutted. Under these circumstances, invocation of extended period and imposition of penalties are not warranted. Merely because a....