2011 (2) TMI 1074

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....8.3.2002.  The noticees in this case are M/s Praxair Carbon dioxide Ltd.(Praxair in short), Raigad, M/s. Vikram Ispat, Raigad (Vikram in short).    2. The facts of the case are briefly stated as follows. Praxair entered into an agreement with Vikram Ispat to manufacture pure/refine carbon dioxide out of the impure carbon dioxide arising in the manufacture of sponge iron by the latter. To enable Vikram Ispat to purify carbon dioxide in their factory, Praxair supplied plant and equipment on lease basis and also supplied personnel at the premises of Vikram Ispat. Vikram Ispat sold the entire carbon dioxide to Praxair at a contract price of  Rs.431 per kg. whereas M/s Praxair sold the goods subsequently at a higher price....

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.... and they are engaged in the trading of the said goods purchased from Vikram Ispat and they hold a dealer's registration issued by the department for the said period. As regards the equipment supplied by Praxair and Vikram Ispat it was given on lease basis. The Commissioner concluded that in the light of these facts, M/s. Vikram Ispat has to be treated as the manufacturer and not Praxair. The Commissioner also observed that from the agreement it can only be concluded that there is mutuality of interest between the two units.  Therefore, if at all the department wants to demand duty on the value at which Praxair sold the goods, then the department has to establish financial flowback between the two and issued show-cause notice according....

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....tment has no merits.   5. We have carefully considered the rival submissions.  We have also perused the agreement for establishment of carbon dioxide purification and liquification facility and products purchase dated 6.12.1999 entered into between the two parties.  Para 1.4 of the said agreement provided that - "The facility equipment shall be got fabricated, purchased, imported or otherwise procured by Praxair at its own cost and shall be leased to Vikram Ispat for the term of this Agreement.  Vikram Ispat shall pay to Praxair, as hereinafter provided, lease rent for the facility equipment, commencing from the date of first sale of CO2 by Vikram Ispat to Praxair from the facility."   6. Similarly 2.1 o....