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2016 (2) TMI 683 - AT - Central ExciseValuation - Short payment of central excise duty on the goods cleared to related buyers - Differential duty with interest - Revenue asserted in the appeal that in terms of MRTP Act, two body corporates will be treated as under the same management if one or more Directors constitute 1/4th of the Directors of the other thus all the buyers are inter-connected with the respondent - Held that:- The provisions of MRTP Act talks about inter-connectivity between two body corporates. Here, it is an admitted fact that four out of the five buyers are proprietory concerns. The respondent is a Public Limited Company. The Revenue also relied on the provisions of Rule 9 without specifically alleging that all the goods manufactured by the respondent are sold, to or through these purported related persons. Further, we find that the Revenue’s assertion that a jurisdic person also can have a ‘relative’ in terms of Section 2(41) of the Companies Act is totally untenable. The ‘relative’ as defined under Section 2(41) should be in such way as specified in Section 6 of the Companies Act. In terms of Section 6, a person shall be deemed to be a relative of other, if, and only if, they are members of a HUF or husband and wife or one is related to other, in a manner like father, mother, daughter, brother, etc. A corporate entity, the respondent being a Public Limited Company, cannot fit into being called a ‘relative’ in this context. It is apparent that the understanding by Revenue is due to mixing up of ‘related person’ with ‘relative’. Further, the submission that the profit accruing from sale through related persons goes to same family or relative is without any factual support and in any case the respondent being Public Limited Company the profit, if any, should flow to all the share holders. - Decided against revenue
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