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2005 (3) TMI 268 - CESTAT, NEW DELHIValuation (Central Excise) - Related person in terms of erstwhile Section 4 - Remand - SSI Exemption - Penalty - Whether extended period of limitation is invocable for demanding Central Excise duty - HELD THAT:- In the present matters, the mutuality of interest has been presumed by Revenue on the basis of sale of entire production by the manufacturing units to M/s. Meghal Enterprises on the basis of mutually agreed price, the goods were known in the market to be those of Kanchan Industries, price list was circulated on the letter head of Kanchan Industries and the entire responsibilities of advertisement and publicity rested with Meghal Enterprises. These grounds do not satisfy the first part of the definition of "related person" as given in Section 4(4)(c) of the Central Excise Act, that is, all these factors do not establish that they have interest, directly or indirectly, in the business of each other. Sale of entire production by a manufacturing unit is not sufficient to prove that the purchaser is a related person as found by the Tribunal in the case of Lakme Ltd., supra. All the factors mentioned in the impugned order for treating M/s. Meghal Enterprises as a related person are nothing but business transaction as Meghal Enterprises purchase the entire production of the goods manufactured by the manufacturing units on mutually agreed price and they are responsible for advertising and publicity by of the goods. Bearing the responsibility of advertisement and publicity by Meghal Enterprises does not make them related person as they have also their own interest in advertising the goods. The second part of the definition of related person as given in Section 4(4)(c) of the Act is also not attracted as it is not that a natural relative is purchasing the goods. Meghal Enterprises as a partnership concern and M/s. Kanchan Kitchen Aid P. Ltd. is a company under the companies Act. We thus hold that the Revenue has not succeeded in establishing that M/s. Meghal Enterprises are a related person. To this extent we allow the appeal without going into the aspect of demand being time-barred. As the question of clubbing of the value of clearance has not been pressed before us, the matters are remanded to the jurisdictional Adjudicating Authority to examine as to whether even after clubbing the value of clearance, the manufacturing units would be eligible for exemption as a small scale unit. All other questions such as demand of duty, if any, being time-barred and penalties to be imposed on any of the Appellants are left to be decided by the Adjudicating Authority in accordance with law and after following the principles of natural justice. All the appeals are disposed of in these manners.
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