TaxTMI 
TaxTMI 
1999 (5) TMI 265
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....business of manufacturing tubes and flaps falling under erstwhile Tariff Item 16 to the First Schedule to the Central Excises & Salt Act,1944 during the relevant period. It was the case of the department that the price at which the appellant sold the goods to CEAT is not the correct assessable value but deliberately kept low value and in some varieties of tubes they were even below the actual costs of production. Since the entire goods have been sold to CEAT except few and that too to the dealers of CEAT there is no scope to arrive at the conclusion that the price charged by the appellant to CEAT is normal price 'ordinarily sold' in the wholesale market. It was the contention of the party before the Adjudicating Authority that CEAT cannot b....
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.... (CEAT) is a related person of the appellant in terms of Section 4(4)(c) of the Central Excises and Salt Act and consequently the price at which CEAT sold goods to their dealers is to be taken as basis in determining the normal price of appellant Art Rubber Industries Ltd., in terms of Section 4(1)(a)(iii) of the Act are the issues to be considered in this case. 4. Heard Shri Joseph Vellapally, learned Senior Advocate accompanied with Ms. Rajani Natarajan & Tarun Gulati, learned Advocates for the appellants and the department was duly represented by Shri Shiv Kumar, learned JDR. 5. Shri Joseph Vellapally, learned Senior Advocate, submits that the department has alleged that the price charged by the appellant to CEAT was infl....
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....the merits, he also submitted that demand was barred by time since the department has invoked the larger period in the instant case. There was no suppression since there was misconception on the part of the department in treating the buyer as a related person and further, the department was well aware of the fact that nearly 90% of the production was being sold to CEAT inasmuch as the relevant gate passes and R.T. 12 returns were regularly scrutinised by the department's officials. On the issue of time bar aspect, he referred to the following decisions:- (1) Pushpam Parmaceutical Co. Ltd. v. C.C.E., Bombay - 1995 (78) E.L.T. 401. (2) Padmini Products v. C.C.E. - 1989 (43) E.L.T. 195 (S.C.). (3) C.C.E. v. Chemphar Dru....
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....e in order to promote the business of ARIL which shows direct or indirect interest of CEAT in the business of the appellants. 7. It was replied by Shri Joseph Vellapally that materials, technical know-how etc. as stated above were not given free of cost and that is not even the case of the department since those items were purchased on valuable consideration. It was also submitted by him that quantum of sale is not a criteria for determination that transaction was not at arm's length relying upon the decision of the Tribunal in the case of Tungabhadra Industries Ltd. v. Collector of Central Excise, Hyderabad reported in 1995 (75) E.L.T. 95 (Tribunal). 8. We have considered the rival submissions and perused the records. While....
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....bility of the first part of the definition that the assessee and the person alleged to be a related person must have interest, direct or indirect, in the business of each other ............... . 9. As can be seen from the record, 20% of the share capital was held by CEAT and nothing is on record to show that the Appellant Company was holding any equity in the capital of CEAT. Hence, it cannot be said that there was a mutuality of interest. If the transactions between the manufacturer and his customer were on principal to principal basis and wholesale price charged by the assessee to the customer was sole consideration for the sale and no extra commercial consideration entered in determining of such price, customer cannot be held to ....