TaxTMI 
TaxTMI 
2004 (10) TMI 493
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....and of duty against, and imposed penalty upon the assessee, after allowing the deduction of duty from the price of the goods charged by the related person. 2. Sh. B.L. Narasimhan, learned Advocate, mentioned that M/s. Marc Pharmaceuticals, manufactures for P or P medicaments (including veterinary medicaments under the House-Mark "MARC"; that they are a partnership firm consisting of the following partners - S/Shri Prem Kishore, Nitin Kishore, Vibhash Anand and Mrs. Suraj Devi; that they had sold their entire production to M/s. Marc Laboratories Pvt. Ltd. of which Shri Prem Kishore is one of the directors; that two show cause notices were issued to them for demanding differential duty on the grounds that they are not eligible for sma....
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....lusion that Marc Lab and the assessee have mutuality of interest in the business of each other; that it is settled legal position that two units - one partnership firm and the other limited company cannot be said to have mutuality of interest in the business of each other merely on account of the fact that some of the directors/partners are common, some common employees are working, etc.; that the mutuality of interest has to be established by means of financial flow back between the two units; that there is neither an averment in the show cause notice nor in the impugned Order to the effect that there is any flow back between them and Marc Lab; that merely because the price at which Marc Lab sold goods is higher than the price charged by t....
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....utside persons; that M/s. Marc Pharmaceuticals had earned big profits during the material period which goes to show that the price was not suppressed. 4. Countering the arguments, Mrs. Krishna A. Mishra, learned S.D.R., reiterated the findings as contained in the impugned Order and submitted that the Commissioner has allowed the deduction on account of duty by treating the price as cum-duty price in view of the judgment of Supreme Court in the case of CCE v. Maruti Udyog Ltd., 2002 (141) E.L.T. 3 (S.C.) which is not correct as the Revenue has filed the Review Petition and the notice has been issued by the Supreme Court; that in the present matters, the price charged by the Depot of the related person has been adopted as the same is ....
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....m and managing director in Marc Lab does not go to prove mutuality of interest of both of them in the business of each other in absence of any extraneous consideration. In Plus Cosmetics P. Ltd. (supra), where the husband and wife were the promoter/directors of both the companies, both the promotors had given unsecured loans to the assessee which also had taken unsecured loan from the Group of Companies and the other company was the sole buyers of the goods, etc., the Tribunal has held that "none of the above factors either independently or cumulatively are sufficient to hold that transaction between CCCL and PCPL are not at arms length, or that the dealings were not based on normal commercial consideration and that, therefore, hold that th....