TaxTMI 
TaxTMI 
2005 (4) TMI 157
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....00 to 31-1-2002, the appellants sold their products to M/s. Utkal Steels Ltd. M/s. Utkal Steels Ltd. availed of the benefit of the Cenvat credit and used them in the manufacture of final products, namely, M.S. Rods and Bars falling under Chapter 72 and sold the goods from their factory to their customers on payment of duty. It has been disputed by issue of show cause notice dated 14-3-2002 that M/s. Utkal Steels Ltd. was related to the appellants and since M/s. Utkal Steels Ltd. used the ingots in the manufacture of final products, Rods and Bars, the duty was required to be paid under the provisions of Rules 8 & 9 of the Central Excise Valuation Rules, 2000. It has been alleged that in terms of Rule 9 of the Valuation Rules, where the relat....
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.... treated to be related. He, further submits that there are 134 shareholders in M/s. Utkal Steels Ltd. Out of 134 shareholders in M/s. Utkal Steels Ltd., most of the shareholders are Private Limited concerns who have got no concern or relation with M/s. Utkal Steels Ltd., the appellants. Only 14 numbers of shareholders of M/s. Utkal Steels Ltd. are from the relatives. In respect of the appellants, most of the shareholders are from outside. Out of 32 shareholders only 4 shareholders are from the relatives. Therefore, he submits that it is futile to allege that M/s. Utkal Steels is related to the appellants. He relies on the following decisions : (1) 1984 (17) E.L.T. 323 (UOI & Otrs. v. Atic Industr....
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....mits that merely because two of the Directors of the appellant-Company were common as that of M/s. Utkal Steels Ltd., it cannot be said that they had got mutuality of interests or that M/s. Utkal Steels Ltd., is related to the appellant Company. He, further submits that in the present case as both the concerns had paid the rents separately to the landlord. Therefore, it is immaterial that the offices are situated in the same premises. Similarly, rents and bills of telephones were also paid separately by the appellants and M/s. Utkal Steels Ltd. Hence, these allegations are not correct. He, therefore, submits that it is not proper and valid that M/s. Utkal Steels Ltd. is related to the appellant Company. The allegations in the show cause not....
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....futed the allegation with a plea that they and M/s. Utkal Steels Ltd. are not related unit. Ld. Commissioner has come to conclusion that in the present case, both the firms have common Director, have their offices in the same premises and also have common telephone numbers. Moreover, one company is the sole and only buyer of the products manufactured by another. Therefore, they are related persons in terms of Section 4 of the Central Excise Act, 1944. The Hon'ble Supreme Court in the case of Union of India & Others v. Atic Industries Ltd. reported in 1984 (17) E.L.T. 323 (S.C.) has interpreted the words "related person" as under : "Valuation - "Related Person"- Meaning of expression "a person who is so associated with the ass....
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....be common. The facts of the present case are similar to the case of Commissioner of Central Excise & Customs, Aurangabad v. Pinnacle Exports Pvt. Ltd. reported in 2002 (150) E.L.T. 1144 wherein it has been held as under : "Valuation (Central Excise) - Company not a related person if Director of the Company who is also a shareholder of the Company is also a Director in another Company and holds 5% shares of that Company - Following the ratio of Tribunal's Orders [1999 (111) E.L.T. 118 (Tribunal)] and [1999 (112) E.L.T. 393 (Tribunal)], the two companies held to be not related persons for the purpose of valuation - Section 4 of Central Excise Act, 1944 - Revenue Appeal dismissed." Where the assessee-company and the buyer-company not hav....
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....971 while the appellant company came into operation in 1991. Out of 134 shareholders in M/s. Utkal Steels Ltd., most of the shareholders are Private Limited concerns, who have got no concern or relation with M/s. Utkal Alloys (P) Ltd. In respect of the appellants, most of the shareholders are from outside. Out of 32 shareholders only 4 shareholders are from the relatives. Other 28 shareholders are not their relatives. No share of the appellant-company is held by M/s. Utkal Steels Ltd. and vice versa. Under such circumstances, there could be no mutuality of interest between the appellant company and M/s. Utkal Steels Ltd. All the decisions conclusively proved that merely because two of the Directors of the appellant company were common as th....