TaxTMI 
TaxTMI 
2004 (12) TMI 259
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....our television sets, an excisable commodity. They were using the brand name of M/s. BPL in terms of Agreement dated 4-10-1991 entered into by them with M/s. BPL Ltd. During the disputed period, 98% of the Television sets were sold to M/s. BPL Ltd. and 2% were sold to M/s. BPL Sanyo Technologies Ltd. (hereinafter referred to as BPLSTL for short). M/s. BPL Ltd. was a Public Limited Company with shareholding by financial institutions as well as general public. Prior to March 94, colour television were liable to excise duty at specific rate. With effect from March 1994, the levy became ad valorem. The Revenue proceeded against the Respondents demanding duty on the basis of sale price of M/s. BPL Ltd alleging that the transaction between the Res....
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....utual interest in the business of each other. (j) The Respondents and their buyers are owned and controlled by one person viz. Shri T.P.G. Nambiar, his family members and other legal entities owned and controlled by them who directly or indirectly or under common control hold at least 51% of the issued and paid up equity capital of the Respondents' Company. (k) The buyers and the sellers are related persons. 3.The adjudicating authority after hearing the Respondents issued a very detailed order concluding that the Respondents and buyer companies, namely M/s. BPL Ltd. & M/s. BPLSTL are not related persons in terms of Section 4(4)(c) of the Central Ex....
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....elied on the Apex Court judgement in the case of M/s. Calcutta Chromotype Ltd. v. Collector of Calcutta reported in 1998 (99) E.L.T. 202 (S.C.). Since almost the entire shares in both the buyer company i.e. M/s. BPL and the Respondent company M/s. Dynamic Electronics Ltd. were held by Shri T.P.G. Nambiar and his immediate family members either directly or through wholly owned legal entity, it is a case where the persons behind both the buyer company and the Respondent's company are one and the same. Under these circumstances, mutuality of interest need not be established as it is presumed to be present as held by the Hon'ble Apex Court in case of Mcdowell and Co. Ltd. v. Commercial Tax Officer [(1985) 3 SCC 230] further reiterated in the ca....
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....nsferable between BPL Ltd. and DEL. (vi) In view of the above reasons the findings of the Commissioner that the transaction between the buyer and the assessee is at arms length appear to be patently wrong. 5.The Revenue was represented by Shri L. Narasimha Murthy, learned SDR and the Respondent was represented by Shri G. Shivadass, learned Advocate. 6.The learned SDR re-iterated the contentions made in the appeal memo. 7.The learned Advocate for the Respondents made the following submissions :- (i) The shareholding pattern after 1-3-1994 indicates that more than 33% shares of BPL Ltd., were held by general public which indicates that Shri TPG Nambiar an....
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....; The Respondent's company came into existence in 1967 whereas BPL Ltd. was incorporated in 1983. The price of the Colour television has been fixed when the televisions are attracted specific activity. The price continue even if the introduction of ad valorem rate. (viii) Even if the two companies are indeed related, the transaction value can be rejected only if the Revenue is able to demonstrate that such relationship has influenced the price. In support of this contention, he relied on the following decisions :- (a) Samtel Electron Devices Ltd., v. CCE, Meerut — 2000 (118) E.L.T. 262 (L.B.) (b) Eicher Ltd. v. ....
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....ested in the other. Mutuality of interest has to be proved. The Original Authority has stated that the Respondent's company and M/s. BPL Ltd are distinct legal entities and there is no legal basis to hold that the one is related to the other. Shri T.P.G. Nambiar and his relatives may hold shares both in the Respondent's company and M/s. BPL. This fact alone does not lead to the conclusion that the two companies are related to each other. On this ground, we cannot say that there is mutuality of interest between them. Let us take hypothetical situations were - 'A' holds shares in companies C-I and C-II as a shareholder. 'A' may be interested in C-I and also C-II since he is holding shares in both the companies. On this ground, can we say that....