TaxTMI 
TaxTMI 
2017 (4) TMI 546
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....s. D.M. Gears (P) Limited (hereinafter referred to as DMGP), a private limited company with Shri Rajiv Gambhir and Shri Sanjay Gambhir, Directors, is engaged in the manufacture of motor vehicle parts, viz. gears for automobiles and tractors. M/s. DD Industries Limited (hereinafter referred to as DDIL) is another private limited company engaged in the manufacture of propeller shafts and sleeve yoke for motor vehicles. M/s. D.D. Sales Corporation (hereinafter referred to as DDSC), a partnership company is a trading firm engaged in the trading of the goods manufactured by DMGP and DDIL. All the goods manufactured by DMGP are sold to M/s. DDIL who sell them again to DDSC and it is DDSC which sells the goods to independent buyers. The partners o....
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....i Rajeev Gambhir under Rule 26 of Central Excise Rules 2002. 2.1 The Show cause notice was adjudicated by the Joint Commissioner vide order in original No. 52/08-09 dated 05.2.2009 by which - (a) duty demand of Rs. 27,40,247/- was confirmed against DMGP under proviso to section 11A(1);; (b) penalty of equal amount was imposed on DMGP under section 11AC of Central Excise Act; and (c) penalty of Rs. Five lakhs each was imposed on Shri Sanjay Gambhir and Rajeev Gambhir under Rule 26 of Central Excise Rules. 2.2 On appeal to Commissioner (Appeals) by DMGP, Shri Sanjay Gambhir and Rajeev Gambhir, the Jt. Commissioner's order was upheld by order-in-appeal dated 6.7.2010. Against this order of the Commissioner (Appeals), these appea....
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....d that there is evidence on record clearly indicating that DDIL was a dummy company being controlled and managed by DMGP; that though these two units have two different brand names, the two brand names /logos are very similar, that the evidence on record shows that not only the registered office of DMGP, DDIL and DDSC is located in the same premises, employees of the three companies are fully interchangeable; that D.K. Jain, DGM (Marketing) of DDSC in his statement dated 21.11.2006 has categorically stated that DDSC has incurred expenses of packing material, freight cartage, advertisement, sales promotion etc. in respect of the goods manufactured by DMGP and DDIL; that Shri Anil Kumar, CEO of DDSC in his statement dated 23.11.06 has categor....
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....en that ever since the MRP based assessment under Section 4A was introduced in respect of motor vehicle parts, DDSC was closed down which prima facie shows that the purpose of this arrangement was for depressing the assessable value of the goods. Accordingly, Commissioner (Appeals) has passed the impugned order clubbing the value of clearances of DMGP and DDIL denying the SSI exemption and ordered for paying duty at the prices at which DDSC has sold to independent buyers. 7. First, we examine the question whether sales made by DMGP to DDIL are entitled to the SSI benefit. It is not in dispute that both these entities have separate registered manufacturing premises. It is nobody's case that there are no equipments in either of the premise....
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....takings". The concept of interconnected undertaking have been borrowed from Monopolies and Restrictive Trade Practices Act, 1969 into Section 4 (2)(b) of the Central Excise Act, 1944. The concept of interconnected undertaking is applicable for determination of value in terms of Section 4 of the Central Excise Act for the purpose of charging excise duty of goods on which the duty is chargeable ad-valorem. 10. We find that members of the Gambhir family have over 90% share holdings in both DMGP and DDIL and as partners of DDSC also control that company. From the various items covered under the definition of interconnected undertakings, it is evident that all the three entities are to be considered as interconnected undertakings. Once these ....
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....GP as well as DDIL and sold exclusively through DDSC, are to be re-determined in terms of price adopted by DDSC when sold to independent dealers. Since various abatements/discounts claimed by the appellant have not been extended, we consider it appropriate to remand the matter to Original Adjudicating Authority to re-determine the value for the purpose of charging excise duty, after extending the eligible abatements/ discounts as per law and the decisions of the Apex Court. (ii) DMGP as well as DDIL have been held to be separate entities with manufacturing facilities and have manufactured different components bearing different brand names. Accordingly, we hold that both DMGP as well as DDIL will be entitled separately to the benefit of S....