TaxTMI 
TaxTMI 
2019 (7) TMI 1794
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....own by the Hon'ble Supreme Court in the case of M/s Ujagar Prints V/s Union of India - 1989 (39) ELT 493(SC). The job work is undertaken by Appellant for MIPL and MFP as well as for other customers. MIPL is also engaged in trading activities. Apart from carrying out job work processed fabrics from the Appellant, MIPL also imports processed fabrics for resale in India. MFP is engaged in the manufacture and export of readymade garments. They captively consume the entire quantity of processed fabrics received from the appellant in the manufacture of readymade garments and export the same out of India. The appellant during the relevant period availed deemed credit in terms of Notification No. 6/2000 CE dated 01.03.2002 on the inputs and utilized the same for payment of duty on the processed fabrics. Alleging that the method of valuation arrived at by the appellants relating to their fabrics processed on job work basis for MIPL & MIP is incorrect as the clearances of job-worked goods to MIPL and MIP, their own divisions, are clearance to related person on not to independent buyers, Show cause notice was issued to the Appellant ....
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....rances made to MIPL is not sustainable. 5. Further, the learned Advocate has submitted that the Rule 9 of the Central Excise (Valuation) Rules, 2000, cannot be made applicable to the present case since the entire sales are not through or to their related persons. In support they have referred the judgment in the case of Ispat Industries Ltd. V/s Commissioner of Central Excise 2007 (2009) ELT 185 (T-LB). Further he has submitted that the appellant are a division of MIPL and the value of the processed fabrics cleared by them is arrived at adopting the method prescribed in M/s Ujagar Prints' case, which is known to the department since beginning. Therefore, there has been no suppression of facts nor misinformation to the department and accordingly invoking of extended period of limitation and confirmation of the demand is unsustainable. They have placed relevant correspondences with the department dated 25.06.1988, Nov 1999, 10.10.2000, price declarations filed from time to time, letter dated 09.04.2003 written by the Deputy Commissioner and Registration Certificate dated 17.08.1994 in support of their submission no facts was suppressed....
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....dered as single unit only. Hence, there is mutuality of interest among these units. In support, learned Advocate referred to the judgments of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Ahmedabad, V/s ITEC Pvt Ltd - 2002 (145) ELT 280 (SC). It is his contention that since these units are inter-connected undertakings, the value of the goods shall be determined in the manner prescribed under Rule 9 of Central Excise (Valuation) Rules. Further he has submitted that since the appellants are related persons, the principle laid down in determining the value in M/s Ujagar Prints' case cannot be adopted in the present case. In support, he has referred to the judgment of Hon'ble Supreme Court in the case of Commissioner of Central Excise V/s M/s S. Kumars Ltd - 2005 (195) ELT 145 (SC). It is his contention that since the appellants could not provide the sale prices and prices of comparable goods at which they received goods from the appellants and thereafter sold to MIPL, the average value was adopted by the department. He has further submitted that ....
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....pared for individual units, the transactions between the appellant and other two Units are not on principal to principle basis and price is not the sole consideration, they are inter-connected undertakings and accordingly are related within the meaning and definition of related persons prescribed under Section 4(3)(b) of Central Excise Act, 1944. The appellants in the course of argument have fairly submitted that all these three Units could be termed as interconnected undertakings. However, there is no mutuality of interest and hence the definition of related person as prescribed under Section 4(3)(b)(iv) of Central Excise Act, 1944 is not satisfied. 12. It is difficult to appreciate the arguments of the appellant in as much as the Profit & Loss Accounts maintained by all the three Units are not separate but common and also the Balance Sheets prepared is common for all these Units. Besides, all these three Units are particularly functioning as single Unit and hence cannot be called as independent to each other and the transactions between them are on principal to principal basis. Therefore, the findings of the learned Commissioner that three Uni....