TaxTMI 
TaxTMI 
2010 (2) TMI 836
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....es ltd., (hereinafter referred to as SSIL) are manufacturers of iron and steel products falling under Chapter sub-heading Nos. 7210.90, 7214.9, 7207.90 and 7204.90 of Central Excise Tariff Act, 1985. SSIL is said to belong to GER Vasavi Group Industries. The group consists of following industries. (I) Sri Vasavi Industries Ltd., Rajam (II) Ferro Alloys Project, Calcutta (III) Sarita Steel Mills Ltd., Rajam (IV) Sri Sarita Synthetics Ltd., Rajam (V) Sri Vasavi Florex Ltd., Bangalore (VI) Sri Sarita Steels & Industries Ltd., Visakhapatnam Sri Vasavi Industries Ltd., (hereinafter referred to as SVIL) Visakhapatnam has anot....
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....l hearing came to the conclusion that appellants M/s. SSIL and SVIL are related persons and hence there is suppression of the value and the assessable value for finished goods cleared by SSIL has to be the price at which the appellants M/s. SSIL sold the goods to other purchasers. 5. Coming to such a conclusion, the learned Commissioner (Appeals) dismissed the appeals, filed. Hence these appeals. 6. Learned counsel appearing on behalf of the appellants draws our attention to the show cause notice, order-in-original and the order-in-appeal. He reads extensively from the order-in-original and submits that it is an admitted fact that M/s. SSIL and SVIL are Public Limited Companies. He would draw our attention to the chart indic....
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....ominal profit margin of Rs. 100/- per MT to M/s. SVIL. It is the submission that no seller will sell steel allotted to him on a nominal margin of Rs. 100/- per MT. The appellant M/s SSIL manufactured the finished goods and sold it to M/s. SVIL at a price which is less than the price charged by them for the supplies made to independent buyers. He would rely upon the decision of the Hon'ble Supreme Court in the case of Supreme Washers (P) Ltd. v. CCE, Pune - 2003 (151) E.L.T. 114 for the proposition that inter-relationship and interdependence of the units were established and hence they have to be considered as related persons. He would also rely upon the decision of the Tribunal in the case of Lubricare Relays Pvt Ltd. v. CCE, Pune 2000 (125....
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.... Banks 62,70,000 19.44 - - 9. NRIs 4,32,300 1.34 - - 10. Public (Others) 27,78,180 8.61 - - Grand Total 3,22,56,570 100 10,60,000 100 It can be seen from the above reproduced chart that the shareholding pattern of both the companies are widely dispersed and different. It is also undisputed that there are nominee directors from IREDA in SVIL, while SSIL does not have any nominee directors. Be that as it may, it is also on record that M/s. SVIL has vide range of shareholding pattern in the form of body corporates and individuals and NRIs. It is undisputed that both the companies are listed as limited companies. We find that the only bone of contention for the revenue....
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....ital. But we fail to see how it can be said that a limited company has any interest, direct or indirect, in the business carried on by one of its shareholders, even though the shareholding of such shareholder may be 50 per cent."                  (Emphasis supplied) 7. In our view, this is the heart of the matter. The shareholders of a public limited company do not, by reason only of their shareholding, have an interest in the business of the company. Equally, the fact that two public limited companies have common Directors does not mean that the one company has an interest in the business of the other. It is, therefore, not possible to uphold ....
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....nd SVIL to press home the charge of depression of the price of the final goods sold by M/s. SSIL to SVIL. The only allegation that Mr. G. Eshwara Rao was a chairman of both the companies and two directors being on the board of both companies, cannot be the reason, for coming to a conclusion that both the companies are related persons, nor also the reasoning that SSIL procured steel from SVIL on a nominal increase of price by Rs 100/-. 11. Further we also find strong force in the contention raised by the learned counsel that the issue involved in this case is for the period 3-12-1998 to 30-6-2000 and show cause notice issued on 17-11-2003 is hit by limitation. It is undisputed that in this case the appellant company were filing the r....