TaxTMI 
TaxTMI 
2007 (6) TMI 95
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....uence, valuation has to be resorted to at 110% (or 115%) of the cost of production as per Rule 8 read with Rules 9 and 10 of Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Since the appellants were aware of the practice, they were held to be liable for penalty as well. The Commissioner has placed his reliance on declaration filed by the appellant/Noticee I under sub-rule (3A) of Rule 173C for the financial year 2000-01. His observations in this regard under para 34 of the impugned order are reproduced below :- "34. I also find that the Noticee in his declaration for the period 2001-02 under Rule 173-C of the erstwhile Rules, 1944 have given contradictory declaration to misled the department. For example, under column ii(d) of Annexure A declaration under sub-rule 3A of Rule 173-C under the head marketing agencies, the Noticee has declared that their marketing is directly to the industrial Consumer (Option-C) and not through related persons (Option-f). It is already established that they were related persons in the relevant time which was deliberately mis-declared by the Noticee. Shri Ramesh Chander Gupta, Chairman of the Noticee had himself confessed i....
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....urther contended that, all demands raised after 19-9-2002 should be treated as time-barred because the Department had in its possession the information of their sale pattern by that date, through the statement made by the Director of Noticee 1. It was further contended that, whatever duty paid by the buyers in this case - whether high or low - would have been absorbed as a credit in their respective units and hence it cannot be said that the Revenue had incurred any loss due to practice adopted by the appellants. 5. The appellants had a whinge about Notification No. 56/2002 dated 14-11-2002, as amended (which relates to exemption to excisable goods produced in Jammu & Kashmir by units located in specified industrial areas). According to them, the said Notification has in any case extended the benefit of excise duty paid under account current for the Noticee 1 for the period covered under the second show cause notice. It was, therefore, argued that demands have been made superfluously. 6. The learned counsel would rely upon the following decisions in support of his contention made relating to "related persons": (i) Jay Engineering Works Ltd. & Anr. v. Union of India & Ors.,....
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....holding company", "subsidiary company" and "relative" have the same meanings as in the Companies Act, 1956 (1 of 1956);" NEW DEFINITION: (After amendment dated 1-7-2000) "(3) For the purpose of this section, - (a)………………………………….. (b) person shall be deemed to be "related" if - (i) they are inter-connected undertakings; (ii) they are relatives; (iii) amongst them the buyer is a relative and a distributor of the assessee, or a sub-distributor of such distributor; or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. Explanation. - In this clause - (i)"inter-connected undertakings" shall have the meaning assigned to it in clause (g) of Section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (64 of 1%9); and (ii) "relative" shall have the meaning assigned to it in clause (41) of Section 2 of the Companies Act, 1956 (1 of 1956)." REASONING: 5. We have heard both sides at great length and perused the voluminous records, In the impugned order, the learned Commissioner has examined the question of relationship under the changed definitio....
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....sactions, as contended before us. The same thing applies to situations where the par ties are inter-connected undertakings. 10. The Commissioner in the impugned order has made a reference to the declaration filed by the Noticee 1. A perusal of the declaration made on marketing pattern certain anomalies and inconsistencies do exist as pointed out in the impugned order. Appellant/Noticee 1 has declared the marketing pattern as "at factory gate" and also as at "captive consumption". It was, however, explained that while what was declared as "at factory gate" would refer to ingots sold by them and what was declared as captive consumption would be relatable to "runners and risers manufactured by them. As regards-the declaration on "marketing agency" which was shown as "direct to industrial customer", it is common sense that buyers cannot be treated as "marketing agency". Admittedly, the Noticee 1 was selling ingots to Noticees 2 & 3. As they were found to be "related persons", the declaration made here is certainly misleading. In view of this, we do not find any material fact to have a view different from the one expressed in para 34 of the impugned order. 11. The argument made be....