TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 342
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.... facts are that: (i) M/s. B. S. Refrigerators are manufacturers of refrigerators and deep freezers falling under Chapter 84 of Central Excise Tariff Act (CETA). (ii) The products manufactured by the Respondent are sold through M/s. BPL Ltd., Bangalore, who market the said goods through their dealer network. (iii) The department observed that there is wide variation between the price at which the Respondent sells the goods to M/s. BPL and the price at which M/s. BPL sells to their customers. (iv) The goods were also cleared under brand name BPL to M/s. BPL Ltd. The Department felt that there was mutuality of interest between the Respondent and M/s. BPL Ltd. (v) The Department issued show-cause notice (SCN) demanding duty by holding that....
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....ansfer price and such transfer price is not the normal price under Section 4. Though he has not elaborated further, the reasons for holding such sale price as not normal price, it seems to suggest that there is no sale taking place between BSUA and BPL and that the transactions are more in the nature of transfer of goods from one division to another division of the same company. In this connection, the following aspects are to be noted. a) BSUA and BPL are Public Limited companies which are widely held companies. Their stocks are quoted in the Stock Exchanges.] b) Both are separate legal entities and the sale of the appliances in question takes place between BSUA and BPL as regular normal sale transactions. c) A perusal of the list of di....
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....BPL cannot be obliterated by loose reference by one official of a company and that cannot be taken as a legal proof that the sale did not take place. A perusal of these documents show this to be regular and commercial attempt by BPL in obtaining a favourable sale price. It is typical for a buyer to ask for the reduction in the prices and the seller to refuse. That in essence is free market all about. From the endorsement on the documents, it is clear BSUA officials have gone on record to allege that BPL is pressurizing to reduce the sale price and such proposals cannot be accepted. These documents only show a distance between BPL and BSUA and not closeness. The transactions are therefore, in fact, at arm s length and not the opposite as sug....
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....ly in respect of the sales made by the Respondents to dealers prior to 1-4-94. The same dealers were buying from M/s. BPL Ltd., after 1-4-94. Therefore, there appears nothing unusual to ask BPL to collect the arrears of payment from such dealers. The Respondents had suggested to M/s. BPL Ltd., to take certain action against the dealers in case of not paying the arrears to the Respondents. This would only indicate a desire on part of BSUA to liquidate outstanding in the market and nothing more as in respect of sales made after 1-4-94 to M/s. BPL Ltd., by the Respondents, no such request has been brought on record. The appellants case is that when the goods are sold by BSUA to M/s. BPL Ltd., the manner of disposal of such goods by M/s. BPL Lt....
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....8-11-93 has no bearing on the issue. (v) The Respondents before us, rely on the following decisions in support of the submissions made by them and we find that these cases help them and not the case of Revenue. (a) Common directors in Public Limited Companies does not indicate interest in the business of each other : (1) Alembic Glass Industries Ltd., v. CCE - 2002 (143) E.L.T. 244 (S.C.) (2) Bharati Telecom Ltd. v. CCE, Chandigarh - 2002 (145) E.L.T. 399. (3) CCE & Cus., Aurangabad v. P.N. Dhoot Investment Co. Pvt. Ltd., - 1999 (111) E.L.T. 118. (4) Affirmation by the Supreme Court of the above case of P.N. Dhoot as reported in Commissioner v. P.N. Dhoot Investment Co. Pvt. Ltd. - 2000 (120) E.L.T. A194 (S.C.). (5) International Com....