TaxTMI 
TaxTMI 
2011 (3) TMI 935
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.... CETA, 1985. They had cleared their product 'Solardyne 80/90' to M/s. Economics Explosives and M/s. Commercial Sales Corporation on payment of duty on the assessable value after deduction of Rs.1,000/- as trade discount and Rs.1,000/- as cash discount for one time purchase of 7-10 MT of such explosives. The lower authority was of the view that such discounts were not given by the assessees to other customers who had purchased similar quantity of the said product. It was alleged in the show-cause notice that as per Form 3 CD submitted to the Income Tax Department the said M/s. Economic Explosives was shown as a relative or an associate concern. Coming to a conclusion that there is short payment of duty, a show-cause notice ....
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....en claimed by the assessees were passed on to only one more buyer namely M/s. Saif Explosives. It is his submission that even though the quantity is less than the specified quantity, the assessees allowed the discount during the relevant period only to create an evidence to avoid proper payment of Central Excise duty in respect of clearances to the associated Company. It is his submission that the mutuality of interest is proved beyond doubt as the assessees have himself declared other firms as the associated Company. Moreover, the duty is recoverable in terms of Section 4(4)(c) of Central Excise Act, 1944 at the price at which the assessees have sold such goods in the course of wholesale trade to a person other than a related person to who....
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....iscount of Rs1,000/- per MT against immediate payment. He would rely upon the CBEC Circular dated 30th June 2000 for the proposition of partnership firm and a private limited company cannot be related firms. It is also his submission that there is no mutuality of interest in the entire case. In the absence of mutuality of interest the judgement of the hon'ble apex court in the case of CCE Bangalore vs. BPL Sanyo - 2003 (153) ELT 398 and UOI vs. Atic Indus - 1984 (17) ELT 323 (S.C.) will squarely cover the issue in favour of the assessees. He would also submit that the Judgement of Jay Engineering Works Ltd. vs. UOI - 1981 (8) ELT 284 will also cover the issue in favour of the assessee inasmuch as that even after some of the part....
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....fied quantity in a month. 20. The Additional Commissioner has observed that, since Shri Nandlal Nuwal is a Director in the Limited Company viz. M/s Solar Explosives Ltd. and also a Partner in the partnership firm viz. M/s. Economic Explosives, the limited Company and the partnership firm are to be considered as members of the Hindu Undivided Family. I do not see any substance in this averment. The Limited Company and the Partnership Firm are considered relatives as per the provisions of the Companies Act without citing any specific provisions of the Companies Act. He has discussed the provisions of the Section 40(a) (2) of Income Tax Act, 1961, which deals with the acceptance of excessive expenditure declared by a per....
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....o as to prove that they were related person in terms of Section 4(4) (c) ibid. There is also no proof to show that they had financial interest in the business of each other. Therefore, the demand of duty does not sustain in both these appeals and as such the imposition of penalty under Section 11AC of the Central Excise Act, 1944 and Rule 173 Q of erstwhile Central Excise Rules, 1944 is also not warranted. In absence of the non provement of demand, the issue of recovery of interest is also not covered." 6. It can be seen from the above reproduced paragraphs, the learned Commissioner (Appeals) has considered the entire issue after scrutinizing the records which was produced before him. We find in para 19 of the findings, the ....