TaxTMI 
TaxTMI 
1996 (1) TMI 270
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....lant company. The latter firm is using the same for manufacture of another product. From November 1994 onwards the appellants also started selling their goods to M/s. Minsulate India, another partnership firm consisting of four partners who are the sons of two of the Directors of the appellant company. This firm sold the material to independent buyers at higher prices. It was held by the Additional Collector vide his order dated 28-11-1985 now impugned before us that Minsulate India is a related person of the appellant firm within the meaning of Section 4(4)(c) of Central Excises and Salt Act, 1944 and accordingly, in terms of the proviso (iii) to sub-section (1)(a) of the said Section 4, the price at which Minsulate India sold the goods wo....
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....ithout prejudice to the stand taken that theirs was the proper price for the material, there was no justification for invoking the longer period of limitation for the issue of notice of demand of duty alleged to have been short paid by them. They had submitted price lists in Part IV which is applicable for sale to a related person but the Assistant Collector had not approved it stating :- "it appears to be superfluous. Where there is no difference in the prices quoted in Part I and Part IV, what is the purpose of submission of P.L. in Part IV." This was in their price list effective from 1-4-1981. There was no suppression or wilful mis-statement of any fact and there was no intention to evade any duty. They were under a bona fide impr....
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....urt) - Mohanlal Bhavsar v. Union of India; (ii) 1987 (31) E.L.T. 756 (Tribunal) - Rakesh Bulb Industries v. Collector of Central Excise, Pune. Shri Malik urged that the transactions in the present case were between a company and two firms in which there was commonness of interest and the supplies were made to a related person. In the Mohanlal Maganlal Bhavsar case, the Supreme Court had held that there was identity of interest between the two concerned firms which could not be said to be at arm's length or independent parties. The price at which goods were sold by one firm to another was not taken as their real value. Shri Malik submitted that this decision would support the Department in the present case. He then referred to the....
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....tal Representative on the basis of a Supreme Court judgment and a Tribunal decision. In the former case the Supreme Court had noted that there was identity of interest between the two partnership firms. Under the partnership agreement, the partners were to share the profits but not liable for losses. It was held that the two firms could not be said to be at arm's length or independent parties and that the prices at which the goods were sold by the manufacturing firm to their Chief Distributor firm could not be taken to be their real value. This judgment was noted and followed by the Tribunal in the case of Rakesh Bulb Industries. There were two partnership firms in that case, one being the manufacturer and the other the buyer. The partners ....
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.... cases cited by Shri Malik, decisions were taken in favour of Revenue, the facts of the present case are different as already discussed earlier. Another material factor is that, as pointed out by the learned Counsel, Shri Gopal Prasad, other manufacturers of slagwool had charged the same or lower prices from their customers. The Additional Collector has observed that this is not relevant as it was not the department's case that the appellant's price was very low. Actually that was the department's stand as seen from paragraph 1.1 of the impugned order-in-original. It has been stated therein that the appellant had disposed standard superfine quality of slagwool at a concessional rate of Rs. 1450 per M.T. to the sister concerns who in turn so....