TaxTMI 
TaxTMI 
2008 (11) TMI 216
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....d both the sides and perused the records. 3. The Appellants, M/s. RDC Concrete Ltd. (formerly known as Unitech Prefab Ltd., in short UPL) are engaged in the manufacture of excisable goods i.e. 'Unipaved Interlocking Concrete Blocks' (payers) of various sizes falling under chapter 68 of the First Schedule to the Central Excise Tariff Act, 1985. On specific intelligence regarding the duty evasion, the officers of Headquarters (Preventive) Wing visited their factory premises on 13-2-2002 as well as their Head office at Mumbai. Based on the statements recorded from their various Company Executives and based on a perusal of records/documents made available to the Preventive Officers, it was observed: * that the appellants had supplied the payers at the site of NSCIT, Uran and Central Excise invoices were raised in the name of M/s. Unitech Ltd. (UTL) C/o Senorita Builders Pvt. Ltd. (Senorita) * That payers were valued at Rs. 250/- per sq. mtr and the Central Excise duty was paid on such value. * That UTL had placed Works Order dated 15-11-1999 on UPL for supply of approx. 75000 Sq. Mtrs. of "UNIPAVED INTERLOCKING CONCRETE BLOCKS" at composite rate of Rs. 531/- per sq. mtr. ....
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.... show cause notice dated 4-7-2005, which culminated in the impugned order as referred to above. 4. The Commissioner confirmed the demand and imposed penalty by holding as follows: (i) By virtue of the fact that the one director of UTL becomes the man aging director of Appellants undoubtedly establishes that both the companies are inter-connecting undertaking. (ii) Both the companies are inter-connected undertakings not because UTL hold 40% share in the Appellants but there are other factors also. (iii) Contention of the Appellants that the goods are immovable is not sustainable since the notice nowhere ever tried to establish to include the cost of laying or installation of payers at site. (iv) If Rule 10 is not applicable in their case, naturally the provisions of Rule 11 is verily available in such cases. Accordingly, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and sub-section 1 of Section 4 of the Act. The reasonable means is nothing but the provisions of Rule 10(a) only. (v) The contention of the Appellants that Assistant Director (Cost) cannot be considered as practicing Cost Accoun....
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....ion 4(3)(b), persons shall be deemed to be "related" if - (i) they are inter-connected undertakings, (ii) they are relatives, (iii) amongst them the buyer is a relative and a distributor of the assessee, or a sub-distributor of such distributor, or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. The explanation to this clause states that "inter-connected undertakings" shall have the meaning assigned to it in clause (g) of Section 2 of the Monopolies and Restrictive Trade Practices Act, 1969. Under Section 2(g) of MRTP Act, 1969, two or more undertakings are inter-connected with each other if the conditions specified in any of the seven specified manners which include (i) if one owns or controls the other (ii) if one body corporate manages the other and (iii) if the bodies corporates are under the same management are satisfied. We are of the opinion that UPL and UTL are under the same management in view of clause (ii) of Explanation 1 to Section 2 ibid, that is to say, if the managing director or manager of one such body corporate is the managing director or manager of the other or clause (iii), that is to sa....
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....is clause "holding company" and "subsidiary company" shall have the same meanings as in the Companies Act, 1956 (1 of 1956)." In the case of the appellants, we find that they have not only supplied the goods against the order received from UTL but also executed the orders received from various other customers and, therefore, invoking the provisions of Rule 10 is not legal and proper. In this connection, we rely on the Tribunal's decision in the case of Pepsico India Holdings (P) Ltd. v. CCE, Mumbai reported in 2004 (163) E.L.T. 478 (Tri.-Del.), in which it has been held as under: "9. In the present case, the assessee is selling part of the goods to unrelated dealers and part of the goods through a related person. Central Excise law contains special provisions in relation to the valuation of goods sold to or through related persons prior to the introduction of new provisions in 1-7-2000 and thereafter. However, the special provision is applicable only in cases where the goods were exclusively sold to or through related persons and not otherwise. This is clear from the wording of the provisions themselves. Proviso 3 to Section 4(1)(a) (prior to amendment) read as under:- "(i....
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....erits. There is not even a whisper or remote allegation that the report of the Asstt. Director (Cost) is biased or prejudiced or given with ulterior motive. The ratio of the case law Bausch and Lomb (India) Ltd. v. CCE, Jaipur reported in 2004 (177) E.L.T. 1081 (Tri.-Del.) is not applicable to the present case as in that case the cost accountant obliged the Department by submitting a second report, which was favourable to the Department. 9. The appellants have contended that in view of the tough competition to bag the order, even if they have sold the products much below the cost as per the findings of the Asstt. Director (Cost), there is no prohibition in law. Especially under Section 4 of the Central Excise Act, 1944, to sell the products below the cost. In this connection, they relied on the following case laws: (i) CCE, Meerut v. Mohan Crystal Glass Works reported in 2000 (118) E.L.T. 691 (T) (ii) Collector of C. Ex, New Delhi v. Guru Nanak Refrigeration Corporation reported in 2003 (153) E.L.T. 249 (S.C.) (iii) Govt. of India (Revision case) in RE : Forres Cambell and Co. Ltd. reported in 1980 (6) E.L.T. 653 (GOI) We find that in the case laws referred to above,....
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.... of the present case. Hence the extended period of five years is rightly invokable in this case. 11. The appellants have contended that once the Commissioner has passed the order dated 28-2-2006, he has become functus officio and is not competent to issue the Corrigendum dated 1-5-2006. They stated that the only course open is to moot the proposal for review to the appropriate authority instead of taking recourse to corrigendum. This having been not done, penalty of Rs. 1,25,51,943/- imposed on UPL under Section 11AC of the Central Excise Act, read with Rule 25 of the Central Excise Rules, 2002 and penalty of Rs. 5,00,000/- imposed on Shri Sanjay Bahadur under Rule 26 of the Central Excise Rules, 2002 are not sustainable and may be set aside. In support of the above, they relied upon the following case laws: (i) CCE, Kanpur v. Somani Iron & Steels Ltd. reported in 2005 (184) E.L.T. 201 (Tri.-Del.) (ii) CCE, Kolkata-VII v. Bharat Lub Industries P. Ltd. reported in 2004 (173) E.L.T. 138 (Tri.-Kolkata) (iii) Kishore Hemani v. CC, Mumbai reported in 2002 (148) E.L.T. 88 (Tri.-Mumbai) (iv) Prakalathan Barlasait v. Collector of Customs reported in 1989 (41) E.L.T. 265 (T) ....