2004 (3) TMI 200

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....M/s. Koron Business Systems Ltd. There are two common Directors. The department's contention is that the two companies are related persons and the transaction between them should be rejected on that ground. The period of dispute is 3-1-1984 - 23-6-1988. The show cause notice was issued on 4-1-1989 alleging suppression of facts with an intent to evade duty. Case was adjudicated nine full years later. In fact this order could be set aside on that ground alone. However we examine the merits and the aspect of limitation in the interest of justice. 2. The Commissioner sets out the following reasons for concluding that M/s. Koron Business Systems Ltd. and M/s. Kores (India) Ltd. are related persons : (a)      &nbsp....

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....stries case 1984 (17) E.L.T. 323, the Supreme Court held that one company holding shares in another does not establish mutuality of interest and therefore are not related persons. In the present case, M/s. Kores (India) Ltd., the distributor, holds shares in the company M/s. Koron Business Systems Ltd. who manufacture the photocopying machines. They are however two separate private limited companies. It also appears that major part of the goods produced by M/s. Koron Business Systems Ltd. are sold through M/s. Kores (India) Ltd. These circumstances still cannot lead to the conclusion that M/s. Koron Business Systems Ltd. and M/s. Kores (India) Ltd. are related persons as sought to be made out by the Commissioner. The same view is held by th....