2009 (6) TMI 768

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....ppellant is M/s. Hindustan Pump and Electricals Engg. Pvt. Ltd. (hereinafter referred to as HPEEPL) is a manufacturer of Submersible Pumps. The pumps manufactured were sold by them directly. Part of the sale was also made through M/s. Malkho Marketing Pvt. Ltd. (hereinafter referred to as MMPL). When the appellant M/s. HPEEPL sold part of its goods through MMPL, Department has invoked Rule 9 of the Valuation Rules to bring entire sale by MMPL to the ambit of tax saying that such sale was made by the related person. According to the department when two Directors of HPEEPL held 30% share in MMPL, both the appellants i.e. HPEEPL and MMPL became related persons. Even though there was no 100% sale by the appellant through MMPL, Revenue has const....

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..... Therefore, without examining the case of removal properly, the authorities have come to a bold conclusion to levy the duty and penalty on both the appellants. 1.5 He relies on the Board's Circular No. 643/34/2002-CX dt. 1-7-02 and submits that if there is a total removal of goods to related persons, Rule 9 shall be applicable. But present case is different because there is no established relationship of related persons. According to him, merely holding 30% share by Directors of the company in another company that shall not make the later to be related persons of the former. 1.6 Ld. Counsel relying on the latest balance sheet as on 31-3-08 pleads that the appellant had financial hardship. 2. Ld. DR is very clear to ....

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....l removal to MMPL while part of removal have gone to different buyers and importers. The appellate order does not bring out clear reason to self speak in no uncertain terms that the authority below had examined the issue thoroughly. We are conscious that in a case where Tribunal has noticed a significant and insignificant percentage of sale to different category of buyers, waiver of pre-deposit was granted and that was in case of Exide Industries Ltd. reported in 2008 (232) E.L.T. 365 (Tri.-Cal.). When we perused the judgment of the Apex Court in the case of Universal Luggage Mfg. Co. Ltd. reported in 2005 (190) E.L.T. 3 (S.C.), there also the percentage of sale was considered to be a dominant criteria for the purpose of applicability of Ru....