2016 (10) TMI 644

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....of the case are that M/s.Glory Hitech Ltd. and M/s.Countech Systems were engaged in the manufacture of currency counting machines during the impugned period. These appellants supplied the entire manufactured quantity to M/s.Jay Enn India (P) Ltd. except for the period 1997-98. The appellants were selling these machines to the trading company @ Rs. 60,000/- upto 31.3.1997 and from @ Rs. 40,000/- per machine and further trading company was selling these machines to banks for price ranging from Rs. 80,000/- to Rs. 1,23,000/-. It was alleged against the appellants that for the period March, 1997 to June, 2000 that the trading company and the appellants are related person under section 4 (4) (c) of Central Excise Act, 1944. Therefore, the assess....

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....e by one person to another person the same cannot be treated as related person in view of the decision of this Tribunal in the case of Kanchan Industries (supra). He further submits that the price charged from the bank cannot be treated as related persons as the appellant is not providing any service to the banks such as warranty, installation, commissioning, testing, after sale services, maintenance, etc. These expenses are borne by the trading company. Therefore, the higher price was charged from the bank as consideration for the services were coupled with the price charged for the machines. He further submits that there is no charge of undervaluation of the products supplied to the trading company, therefore, the extended period of limit....

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....ants and the trading company are not related to each other in terms 4 (4) (c) of Central Excise Act, 1944. While determining the term 'related person' this Tribunal has examined the issue in the case of Reliance Industries Products (supra) and observed as under; The three conditions are to be satisfied before it can be inferred their existing relationship namely, (i) there should be mutuality of interest, (ii) alleged related person should be related to the assessee as per Section 4(4)(e) even in the Act and (iii) importantly the price charged from the related person was not the normal price but a price lower than the normal price and because of extra commercial consideration, the price charged was less than the normal value.   ....