TaxTMI 
TaxTMI 
2024 (12) TMI 1582
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....stomers. 2. In the course of audit of the assessee by LTU, the audit team appears to have noticed the price charged for OPC 53 grade cement for one of the industrial customers was higher than the price charged to CBPL; they also appear to have noticed in the assessee‟s annual report for the year 2010-2011 that the taxpayer had declared CBPL as a related party in terms of Accounting Standard - 18 [„AS‟ for short] issued by the Institute of Chartered Accountants of India. This assertion in the Financial statement prompted the revenue to call for the details of clearances of cement made in bulk to CBPL right from 2008-2009 onwards, for verification. The same led to the issuance of 8 show cause notices for the periods 2008 to 2012. The primary reliance of the revenue at that point of time was the annual report of the taxpayer. The Revenue also indicated in the SCN that Rules 8 and 9 of Central Excise Valuation Rules, 2000 were not applicable since cement was not issued for further manufacture of any assessable goods, but utilised for construction activities by the CBPL. 3. It appears that the taxpayer upon receipt of the above SCN contended that the said CBPL wa....
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....n the absence of the applicability of the above section of the Companies Act, the conclusion drawn by the authorities below has no legal basis. Both the authorities should not have relied on the AS 18 since there is no reference at all to the AS 18 in Section 4(3)(b) of the Act. Moreover, by virtue of their Constitution CBPL is a separate legal entity having no common interest, either directly or indirectly, in the business of the appellant and just because CBPL happens to be an associated company, the same cannot be inferred as a related party. 5. It was also contended, without prejudice, that the transaction value relating to the supply of cement to CBPL should not have been interfered with and the price adopted for quantification of differential duty ought to have been construed as cum-duty price as per the ruling of Supreme Court in the case of Maruti Udyog Limited. In that view, even the penalty imposed is not in accordance with law. For the same reason, it was also contended that the invocation of extended period of limitation in terms of the proviso to section 11 A of the Act could not have been invoked. 6. Per contra, Smt. O.M. Reena, Ld. Addnl. Commissioner appearing....
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.... to clarify the relationship. This assumes relevance as the relied upon documents clearly indicate CBPL as an „Associate‟. Further, Show Cause Notice dated 04.12.2012 was issued on the premise that it was noticed by the Revenue that in respect of invoice No. 7038 dated 09.05.2011 to M/s. La Farge Aggregates and Concrete, Chennai, the price adopted for OPC 53 G was Rs.3626.47 per MT whereas a comparable sale effected to Chettinad Builders P. Ltd., Chennai Vide invoice No.6697 dated 09.05.2011 was at the rate of Rs.2256.43 per MT. In paragraph 3 of the Show Cause Notice, the authority after verifying the appellants reply dated 05.06.2012 and upon scrutiny of purchase order document, appears to have found that the said CBPL merely stated the requirement of quantity of final products like OPC, Slag, etc., and the rate at which it was to be supplied to them which indicated that the price for supply of final goods to the said CBPL was dealt by the tax payer under section 4, transaction value as being done in respect of supply to any unrelated person. 11.1 We have considered the books of accounts/ schedules to Balance Sheet and P & L a/c; the relevant entry as appearing the....
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.... Logistics P.Ltd 3649 7634 Chettinad Structural & Engg. P.Ltd 0 1088 Sale of Goods Chettinad Builders P.Ltd 1263 932 Services Chettinad Builders P.Ltd 6604 6652 Chettinad Logistics P.Ltd 1230 2264 South India Corpn.Ltd 1840 67 Chettinad Earthmovers P.Ltd 2109 2128 Chettinad Structural & Engg. P.Ltd 0 541 Deposit Accepted Chettinad Lignite Transport 9295 3000 Services P. Ltd. Chettinad Hospitals P.Ltd 4000 17000 Allied Minerals & Metals P Ltd 39980 0 Chettinad Logistics P.Ltd 5300 8000 Deposit Repaid Chettinad Logistics (P) Ltd. 9875 1000 Chettinad Hospitals P.Ltd 37900 600 Chettinad Lignite Transport 500 4000 Services P. Itd Allied Minerals & Metals P Ltd ** 39980 0 Interest Chettinad Logistics P.Ltd 888 1303 Chettinad Lignite Transport 1068 Services P. Ltd. 9330 Chettinad Hospitals P.Ltd 2472 3471 Dividend Dr. M.A. M. Ramaswamy 918 918 Sri M.A.M.R.Muthiah 558 558 Chettinad Software Services P.Ltd 261 261 Remuneration Sri M.A.M.R.Muthiah 623 48 inlats Rs ** Amount adjusted on amalgamation Document 2 Chettinad Cement Corporation Limited A) Nimes ....