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2019 (7) TMI 1794 - AT - Central ExciseValuation of goods - Deemed CENVAT Credit - job-work - related party or not - Mutuality of interest - N/N. 6/2002-CE (MT) dated 01.03.2002 - Revenue’s argument is that since the appellants and the other two Units for whom they undertake the processing of fabrics on job work basis being related to them, the principles of job work valuation laid down by the Hon’ble Supreme Court in UJAGAR PRINTS ETC. ETC. VERSUS UNION OF INDIA & OTHERS [1989 (1) TMI 124 - SUPREME COURT] is inapplicable - time limitation - HELD THAT:- In the impugned order, learned Commissioner while analyzing the evidence on record held that since all Units belongs to the same management and separate Balance Sheets are not prepared for individual units, the transactions between the appellant and other two Units are not on principal to principle basis and price is not the sole consideration, they are inter-connected undertakings and accordingly are related within the meaning and definition of related persons prescribed under Section 4(3)(b) of Central Excise Act, 1944. The appellants in the course of argument have fairly submitted that all these three Units could be termed as interconnected undertakings. However, there is no mutuality of interest and hence the definition of related person as prescribed under Section 4(3)(b)(iv) of Central Excise Act, 1944 is not satisfied. Related persons or not - HELD THAT:- It is difficult to appreciate the arguments of the appellant in as much as the Profit & Loss Accounts maintained by all the three Units are not separate but common and also the Balance Sheets prepared is common for all these Units. Besides, all these three Units are particularly functioning as single Unit and hence cannot be called as independent to each other and the transactions between them are on principal to principal basis. Therefore, the findings of the learned Commissioner that three Units are related persons within the Section 4 (3) (b) of Central Excise Act, 1944 is correct and sustainable. Extended period of limitation - HELD THAT:- The department was fully aware of the fact that M/s Mandhana Dyeing, the Appellant is a Division of MIPL who undertake processing of goods for MIPL on job work basis and supplied the same to the said after completion of the processing of fabrics supplied to them. The communications between the Appellant and the department commencing from 04.06.1998 clearly indicate that while responding to the objections on valuation of job work of fabrics for their other units, the appellant had clearly mentioned that M/s Mandhana Dyeing is a Division of MIPL. In these circumstances, invoking the extended period of limitation cannot be sustained. Thus, even though on merit, it is found that M/s Mandhana Dyeing, the Appellant are related to MIPL and MFP (Export Division) and the valuation of processed goods on job work cannot be determined. However, the demand confirmed invoking the extended period of limitation cannot be sustained - appeal allowed - decided in favor of appellant.
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