TaxTMI 
TaxTMI 
2019 (9) TMI 1522
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....appellants are mostly procuring their raw material from a dealer namely M/s P. K. Industries, Jaipur. One of the products viz. the 'barbed wires' manufactured by the appellants was being cleared to the independent buyers as well as to M/s P. K. Industries who further sell it to retailers. 2. During audit by AG Audit, Rajasthan, it has been observed that the appellant have procured maximum raw material from M/s P. K. Industries (a sister concern of appellant and registered excise dealer). Thus, it appeared to Revenue that appellant is required to pay Central Excise duty on the value at which the related person sold the goods to unrelated person, as provided in Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) ....
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....cess. 3. It is further alleged in the show cause notice dated 06.07.2015 that as regards barbed wire sold to sister concern M/s P. K. Industries, the fact was never disclosed to the Department, which came to knowledge only in the course of audit. Thus, appellant appears to have suppressed the material facts regarding sale of excisable goods to related person and accordingly extended period of limitation was invoked under proviso to Section 11A(i) and (iv) of Central Excise Act. 4. A follow up show cause notice dated 25.01.2016 for the subsequent period January, 2015 to December, 2015 was issued on the same grounds demanding duty of Rs. 6,16,803/-. 5. Both the show cause notices were disposed of vide common order-in-original dated 0....
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.... P. K. Industries are family members of the Directors of the appellant company, but none of the Directors of the appellant company is a partner in M/s P. K. Industries. It is contended in the show cause notice that M/s P. K. Industries has been shown as related person in the balance sheet of the appellant, hence M/s P. K. Industries is the related person of the appellant. The appellant is a private limited company and hence a different legal entity than that of M/s P. K. Industries. Merely by showing a firm as a 'related person' in their balance sheet, the said firm does not become a 'related person' as far as the provisions of Section 4 of the Central Excise Act, 1944 is concerned. For the purpose of Section 4 ibid, for declaring any firm ....
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....n by M/s P. K. Industries to their customers have also been included in the value for confirming the demand. Further urged that M/s P. K. Industries have paid service tax on the amount of freight, loading and unloading charges incurred by them. Service Tax and Central Excise duty are mutually exclusive and cannot be levied on the same transaction or value. 10. Learned Authorised Representative appearing for the Revenue relied on the impugned order. 11. Having considered the rival contentions, we find that the Court below have ignored the fact that there are also sales to unrelated parties at same prices or even lower price, as compared to the transaction value for clearance to M/s P. K. Industries. Further, classification of M/s P.....