2007 (10) TMI 124

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....]. - The impugned order sustained demand of duty of Rs. 48,749/-, the interest due thereon and the penalty of Rs. 500/- imposed on the appellants under Rule 173Q of the Central Excise Rules, 1944. The equal amount of penalty imposed by the original authority was restricted to the duty demand relating to the period after 28-9-1996. 2. The appellants M/s. Rumi Herbals (P) Ltd.(RUMI for short), an....

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....M to RUMI. RUMI and RMLM were thus found to be related persons. The assessee had suppressed these facts. Considering the sale price of RMLM as basis of the assessable value of RUMI, the aggregate value of clearances of the assessee had been found to have exceeded the exempted value of clearances and the assessee was liable to pay duty in respect of such excess clearances made in the financial year....

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....l in 2001 (133) E.L.T. 590 (Tri.- Chennai), the two entities could not be treated as related persons. RMLM was a separate class of buyer compared to other dealers. In respect of other dealers the assessee had incurred cost of transportation and cost of publicity materials. Sale price of same products of all dealers was same. The stray cases of deposits by the assessee's customers of some amounts i....

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.... not have to incur when they sold the goods to RMLM. RUMI did not pay overriding commission to sub-dealers (and added to assessable value) for clearances to dealers in the South unlike in the case of dealers operating under wholesale buyers in other regions. The department had no evidence of financial flow back between RUMI and RMLM. We do not find any material to substantiate a finding that RUMI ....