TMI Blog2000 (1) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period were final and there was no provisional assessment involved. Therefore, since in law the only way for collection of alleged short paid duties was therefore, Section 11A and show cause notice invoking the said section. In the absence of the said notice, no duty could be demanded and confirmed for this period. (b) The basic issue for the entire period concerns the department's allegation that the appellants are related to their only buyer mentioned above. Therefore, in view of this relationship, the assessable value declared by the appellants for clearance from their factory gate does not represent the correct assessable value under Section 4, inasmuch as the price at which M/s. Nemaru Coiffure has sold the goods in whole sale should be the correct assessable value. The learned Counsel submits that in this respect, firstly the department has not led any clear evidence to substantiate such relationship because the show cause notices in question have merely alleged that the two Companies appear to be related because of being commonly owned; and secondly because the buyer M/s. Nemaru Coiffure are the favoured buyer. This established mutuality of interest as per the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not considered in detail any such evidence, the Commissioner (Appeals) has not touched upon the issue at all. Therefore, the learned Counsel submitted the there is no evidence to show that such relationship existed and on this issue seeks decision in the appellants' favour. (c) The third issue agitated before us by the learned Counsel concerns their claims for deduction from the assessable value for both parties made above in respect of the seven items as follows : (i) Secondary packing (ii) Turn over tax (iii) Average Freight (iv) Insurance (v) Octroi (vi) Handling Charges (vii) Cost of bought out items supplied with the bottle. 4.The learned Counsel submits that the facts are that these cosmetics are contained in bottles which are primary packing. Thereafter 12 such bottles are packed in one carton packing by the buyer. These bottles are also covered by printed thin packets. The goods are removed from the factory gate in such packing of 12 units contained in each carton. Thereafter the buyer M/s. Nemaru Coiffure choose to consolidate some of such cosmetics into bigger cartons for easy transportation and sale. He submits that since the goods as were cleared from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in 1988 (34) E.L.T. 662 (Tribunal). 9.The learned Counsel therefore, prays that in view of the submissions above, the entire order in appeal impugned needs to be set aside. 10.Shri S. Kannan, learned DR on the other hand submits that it is significant to note that the appellants are now not contesting the question of related person for the period from 1-1-1988 to 31-3-1991. As regards, demand for the period from 1-1-1988 to 31-8-1988 without issue of show cause notice under Section 11A, the learned DR reiterates the findings of the lower authority and submits that the demands are still sustainable. Stressing the aspect of relationship between the seller-appellants and the buyer, the learned DR submits that the question of secondary packing should be made in this light. He explains that since the goods were sold by the buyer who is a related person only after further packing in the larger cartons and because this buyer is related to the appellants-manufacture, the factory gate is bound to be shifted to the premises of the related person. Therefore, not only that the assessable value will be the price at which this person i.e. M/s. Nemaru Coiffure has sold the goods in whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty demanded is set aside. As far as the question of agitating the issue of allegation that the appellants and M/s. Nemaru Coiffure were related persons under Section 4 of the Act, upto the period ending 31-3-1991, we note that the said allegation is not contested before us for the reason already made by the learned Counsel and recorded above. Therefore, we are not required to give any finding on this issue of related person. Therefore, the assessable value for assessment of duty of the appellants products in question shall be the price at which the goods were sold by the related person i.e. M/s. Nemaru Coiffure as is already a ruling decision of the Collector (Appeals) in order in appeal No. 20/89, dated 27-2-1989. We find that the appellants however, have claimed deduction from the price of seven items already recorded above. On consideration of this claim for deduction from this price before arriving at the assessable value, we find that the submission of the learned Counsel on this ground has great force. As far as deduction of secondary packing is concerned, we are not in a position to accept the argument of the department that the factory gate has deemed to be shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r not. On careful consideration, we find that the hand gloves are used as a protective cover by the buyer for this hair dye. The hair dye can also be used without the hand gloves. Similarly even though the measuring cup is to facilitate the user in pouring out the advised quantity of the dye and it cannot be said that the plastic cup is an essential item to be used by the customer for the simple reason that the main liquid is a medicine which have to be used only as per the prescribed measure dose to which did not provide such measuring cup. Therefore, in the market, neither the hand gloves nor the measuring cup can be held to be regarded as essential for the hair dye to be used for measuring the dose. In these circumstances, for the bought out items we feel that the ratio of the decision of the Tribunal in the case of Diamond Clock Manufacturing Co. (surpa) is applicable to this issue. Therefore, we find that the appellants are entitled to deduction for these bought out items of dispute mentioned above of the seven items on which they have sought for deduction from the assessable value. We order accordingly. The only issue which is left for our examination is(8) concerning deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh price list submitted by the assessee for subsequent period in view of the change in the marketing pattern brought out on record. This issue should have been considered independent of that order in appeal and purely on merits. The Assistant Collector has merely brushed aside the existence of new contract tantamounting to only one entire for the purpose of "show". It is not possible for us to brush aside this in the same manner. When we peruse the order in appeal impugned relating to this order in original we find that the Commissioner (Appeals) has merely presumed the existence of this relationship and has not considered the issue at all. Therefore, we find that with respect to this issue, the order in appeal is not a speaking order and the matter needs to be remanded for re-consideration of this issue on merits to the Commissioner (Appeals) concerned. We have already held above that the deduction claimed for the earlier period would be allowed as deduction from assessable value. That decision would also hold good for this period. 15. In view of the aforesaid analysis and findings we conclude that: Demand upto 31-8-1988 without show cause notice is set aside, Deductions enu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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