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2018 (11) TMI 1451 - AT - Central ExciseValuation - related party transaction - Section 4 (1) (b) of Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation (Determination of the Price of Excisable Goods) Rules, 2000 - Shri HJ Rathi is the Managing Director of M/s.RDCPL and the Manager of a Trust, which is partner in M/s.JTC - Over-riding commission paid by the appellants to M/s.JTC - time limitation. Held that:- M/s. JTC belongs to a Trust i.e., Smt.Chandravatibai Laddha Trust, in which Shri H.J. Rathi is said to be the Manager. The Trustees are partners in M/s. JTC. Shri HJ Rathi is the Managing Director of M/s. RDCPL. Further for the very reason that Shri HJ Rathi is the Managing Director of M/s.RDCPL and the Manager of a Trust, which is partner in M/s.JTC cannot be the sole reason for holding that the appellants and M/s. JTC are related. It can be seen that the appellants are a private limited company whereas M/s.JTC is a partnership firm. They cannot be held to be related - No element of mutuality of interest and flow back of money from M/s.JTC to the appellants is either alleged or evidenced. M/s.JTC are not also held to be interconnected undertaking. Therefore, the situation enumerated in Section 4 (3) (b) of the Central Excise Act, 1944 are not fulfilled. The only fact that M/s. JTC has a temporary office in the premises of the appellants. Some staff members of M/s. JTC are sitting there, by itself cannot be become a valid ground to hold them to be related. Over-riding commission paid by the appellants to M/s. JTC - Held that:- It cannot be by any stretch of imagination leveled to be a flow back of money. Only in case where the appellants have received certain money from their customers influence of such consideration on the price at which the goods are sold can be a thought of. Time Limitation - Held that:- The appellants have been regularly filing the required declaration under Rule 173C (iii) (a) giving the details of the marketing pattern and interalia mentioning the fact that M/s.JTC have premises at the appellants. Therefore, no suppression of fact can be alleged - The period covered in the show-cause notice is from October 1999 to March 2003 and show-cause notice has been issued on 20/05/2005. Abinitio also the period further to May 2000 is clearly barred by limitation and further extended the show-cause notice is vitiated - extended period cannot be invoked. The demand confirmed against the appellant, M/s. RDCPL do not survive either on merits or on limitation - interest, penalty, etc. confirmed against the main appellant, i.e., M/s. RDCPL also do not sustain. Appeal allowed - decided in favor of appellant.
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