TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 1451
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....ce of Excisable Goods) Rules, 2000. The department has also alleged that the appellants, M/s.RDCPL have paid over riding commission to one of the distributors i.e., M/s.JTC and on account of that Central Excise duty of Rs. 6,94,924/- is payable by them. On completion of the investigation a show-cause notice No.4889 dated 20/05/2005 issued to all the four appellants, i.e., M/s.RDCPL was issued to M/s.RDCPL, Shri H.J. Rathi, S.H. Rathi and Shri H.J. Rathi. All the appeals are taken up together for consideration. 2. The show-cause notice was dropped by the Additional Commissioner, Central Excise vide order dated 31/01/2007. On an appeal filed by the Commissioner, Central Excise, the Commissioner (Appeals) vide order No.SRK/144/RGD/2008 dated 31/03/2008 has remanded the matter to the lower authorities for passing fresh order. Additional Commissioner, Central Excise vide order-in-original No.20/08-09 dated 31/12/2008 has confirming (i) Central Excise duty of Rs. 18,10,443/- on goods cleared to M/s.JTC by the appellant, M/s.RDCPL (ii) confirming duty of Rs. 6,94,924/- on the over-riding commission paid by the appellants to M/s.JTC (iii) imposing penalty of Rs. 25,05,367/- on the appella....
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....ade of M/s.JTC, which did not have independent existence of their own. Therefore, the order-in-appeal having travelled beyond the scope of the show-cause notice is also liable to be set aside. 5.2 The learned Counsel for the appellants making further submissions on the merits of the case has stated M/s.JTC is not covered under the scope of "related person" in terms of Section 4 (3) (b) of the Central Excise Act, 1944. He submitted that the appellants are a private limited company and M/s.JTC is a partnership firm, therefore, Section 4 (3) (b) (ii) cannot be invoked as they are not natural persons; Moreover, Section 4 (3e) (b) (iii) is invocable only when the buyer is a relative and distributor. M/s.JTC is neither a distributor nor a relative; Section 4 (3) (b) (iv) cannot be invoked as the appellants and M/s.JTC have no interest directly or indirectly in the business of each other. The appellants have not provided sharing relation with M/s.JTC or M/s.JTC have not share holding in the appellants Limited Company. Therefore, in the absence of mutuality of any business interest and in the absence of flow back of any financial benefits from M/s.JTC to appellants. There is no allegation....
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....i Ingots Ltd. Vs. CCE - 2016 (338) ELT 421 (Tri- Ahmed) c) Hatsun Food Company Vs. CCE - 2004 (178) ELT 676 (Tri- Che) d) CCE Vs. Sterlite Optical Technologies Ltd. - 2018 (359) ELT 723 (Tri-Mum) 5.6 Learned Counsel for the appellants has also submitted that the quantification is also made in erroneous manner without giving allowance to Sales tax and Excise duty paid by M/s.JTC. 6. Learned AR for the department have reiterated the findings of the Order-in-Original dated 31/12/2008 and Order-in-Appeal. 7. The issue involved in this case is in a narrow compass. The issue to be decided in this case is as to whether M/s.JTC is a related person in terms of Section 4 of the Central Excise Act, 1944 and if so, whether the goods (Valuation of Rules) cleared by the appellants to M/s.JTC should be based on the value at which they are further sold by M/s.JTC. The facts of the case are that M/s.JTC belongs to a Trust i.e., Smt.Chandravatibai Laddha Trust, in which Shri H.J. Rathi is said to be the Manager. The Trustees are partners in M/s.JTC. Shri HJ Rathi is the Managing Director of M/s.RDCPL. Further for the very reason that Shri HJ Rathi is the Managing Director of M/s.RDCPL and th....
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....t enough that the person alleged to be a related person has any interest directly or indirectly in the business of the assessee. It is essential to attract the applicability of the first part of the definition that the assessee and the person alleged to be a related person must have interest direct or indirect in the business of each other. The equality and degree of interest which each has in the business of the other may be different; the interest of one in the business of the other may be direct while the interest of the latter in the business of the former may be indirect, but that would not make any difference so long as each has got some interest direct or indirect in the business of the other. In cases, where 50% share of the manufacturing company is held by the customer company, the customer company can be said to be having interest in the manufacturing company as a shareholder but for this reason, it cannot be said that the manufacturing company has any interest direct or indirect, in the business carried on by one of its shareholders even though the shareholding of such shareholders may be 50%. In the absence of mutuality of interest in the business of each other, the cus....