2018 (1) TMI 1163

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....in capital goods to M/s Kansal Enterprises Chandigarh, who is sister concern/related person of the appellant. On the basis of Rule 9 of Central Excise Valuation Rules, 2000, read with Board Circular 643/34/2002-CX dated 01.07.2002, the Revenue felt that the capital goods sold to sister concern/related person should be assessed on the depreciated value. Accordingly, a show cause notice was issued demanding duty of Rs. 32,230/- along with interest and proposing penalty under Rule 25 of the Central Excise Rules, 2000. The matter was adjudicated and the demand was confirmed along with interest and penalty of equivalent amount was imposed. In appeal, the Commissioner (A) upheld the order of adjudicating authority. Aggrieved from which, the appel....

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....is faulty. In the adjudication order, the adjudicating authority has introduced the basis of the relationship by bringing in the fact that the proprietor of M/s Kansal Enterprises Ltd. is related to the Directors of the appellant company and they have thus mutuality of interest in the business of each other in as much as the proprietor of M/s Kansal Enterprises i.e. Smt. Veena Kansal, who is herself one of the Directors of the Noticee company is also wife of other Director i.e. Shri. Naresh Kansal and sister of another Director Shri. Rakesh Gupta. Thus there is direct relationship between the Directors of the appellant company, and the proprietor of M/s Kansal Enterprises and therefore, they are covered under the category of related person ....

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....d that the Managing Director of both the companies was the same and one more Director was common. It was also found that the shares of both the companies were held by the members of the `Sharma family but that is quite a vague expression and, therefore, in our view, the Appellate Tribunal was partly right in giving the direction to ascertain the breakup of the shares of each member of the family in the two companies. To lift the veil the actual shareholding of both the companies and the persons in control of the management of both the companies needed to be ascertained to consider the identity of interest of both the companies in the business of each other. No presumption of such mutuality of interest in the business of each other could hav....