TaxTMI 
TaxTMI 
2002 (3) TMI 398
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.... as A1), manufacturer, is liable to pay duty of Rs. 31,82,60/- being the amount of duty of Central Excise, evaded due to incorrect valuation of the Iron and alloy steel products the excisable goods cleared by them during the period to the three buyers viz. appellants M/s. Southern Steels & Forgings (hereinafter referred to as A4), M/s. India Industrial Enterprises (hereinafter referred to as A5), M/s. Southern Steels & Ferro Alloys Corporation (hereinafter referred to as A6) all partnership firms consisting of relatives of one Shri S.K. Gandhi (hereinafter referred to as A-3) and controlled by him. Appellant Shri M.R. Jayaram (hereinafter referred to as A-2) is the Managing Director of A-1). 2. A notice was issued pursuant to the en....
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....sp;Since the transactions were not at Arms length, the price at which goods were sold by A1 to A4, A5, A6, could not be considered as the normal price. The same could not be accepted and resort to proviso (iii) to Section 4(1)(a) of Central Excise Act, 1944 for the purpose of determining the value for levy of duty was called for as that would represent the normal wholesale price and on which value for the determination of Central Excise Duty should be made. (b) The Commissioner after hearing the parties ordered - (i) Confirmation of the differential duty Rs. 31,82,601/- under Section 11A of Central Excise Duty on A1. (ii) Penalty of Rs. 31,82,601/- under Section 11AC on A1. (iii)&nb....
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....etc., supplied by the party of the FIRST PART confirming to ISI standard on the terms and conditions herein after appearing :- TERMS AND CONDITIONS :- 1. This agreement comes into force with effect of 25th May 1994. The party of the FIRST PART will start supply of the melting scrap, HP Sponge Iron Billets and other inputs to the party of the SECOND PART as per the requirements depending upon the production planning and schedule of the party of the SECOND PART. 2. The Party of the SECOND PART in turn will convert the steel scrap into steel billets and rounds as per specification strictly and deliver such converted material to the party of the FIRST P....
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....steel scrap received by the party of the SECOND PART from the party of the FIRST PART and billets manufactured thereof shall be held by the party of the SECOND PART as trustees of the party of the FIRST PART. Therefore these commodities mentioned herein above are not liable for sale, mortgage, pludging etc. by the party of the SECOND PART except delivering the said commodities to party of the FIRST PART and/or their order. Further these commodities are also not available for any attachment, injection etc. concerned with the party of the SECOND PART and no lien over such commodities/stocks of the party of the FIRST PART can be excessive by the banks and/or any financial institution of the party of the SECOND PART. The party of the SECOND PAR....
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....d Shri G.V. Menon, Manager (Finance) that the entire amount of operation from procurement, pricing of raw materials to production planning, defrayment of costs of manufacture and the selling price of the final product were not the independent decisions arrived at by A2 or A1 but were the result of the Puppet Strings being pulled by A3 not even in the back ground hidden away, but brazenly in an open manner. We therefore accept that the determination and sale of the final products was not a 'negotiated prices' as strongly urged by the Advocate for A1 & A2. Since price was definitely not the sole consideration for sale in the facts of this case before us, the same cannot be accepted. The sale price and removal are not at arms length. (b)&em....
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.... to conclude from the joint pricing clauses to reject the price to be under Section 4(1)(a). It was thereafter held - "18. From the total analysis of all the abnormal conditions of sale and purchase which have been brought on record, the inevitable conclusion to which we are led is that the prices stipulated in the agreement and the manner of their determination cannot be considered to be normal. Such prices are not the prices on which the goods are ordinarily sold by the manufacturer in course of wholesale trade, and extra commercial considerations have entered in the determination of the price. In these circumstances, we consider that the only permissible method under the law was the one adopted by the authorities below which is c....