Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2015 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 1237 - AT - Central ExciseDuty demand - Valuation of goods - Related person - deduction of these trade discounts offered to dealer being a group company selling entire production of the assessee - held that:- just because the entire production of goods of the appellant company was being sold to M/s. AIL who were selling the same at a higher price or that M/s. AIL were incurring the expenses or marketing and advertisement of the goods produced by the appellant company, the two cannot be treated as related persons in the sense that there was mutuality of interest in the business of each other. Similarly, just because the appellant company along with two other group companies, had extended loan of about ₹ 50 crore to M/s. AIL, it cannot be said that the transactions between the appellant company and M/s. AIL was not on principal to principal basis, as it is not the contention of the department that the loans extended by the appellant company - and two other group companies, M/s. Adonis (India) Limited were interest free loans or at interest much lower than the market rates. The appellant company and M/s. AIL can be treated as related persons if there is an evidence to prove that the appellant company had all pervasive financial year and managerial control over M/s. AIL and M/s. AIL were just an extension of the appellant company. But in this regard, we do not find any such evidence. Commissioner was required to go only into the question of duty demand of ₹ 35,63,928/- confirmed against the appellant company and also question of imposition of penalty on them and other notice. The duty demand of ₹ 28,35,170/- had not been challenged by the department and as such was not the subject matter of the appeals filed before the Tribunal which were decided by the Tribunal vide order dated 4/5/2001. In view of this, the Commissioner's order confirming the duty demand of ₹ 28,35,170/- is not only totally incorrect order but also a perverse order and, therefore this part of the order has to be set aside. Apex Court also in the case of CCE Vs. Xerographic Limited reported in [2006 (3) TMI 308 - SUPREME COURT] has held that the distributor companies of an assessee cannot be treated as related persons, as existence of extra commercial consideration for discarding the normal price between the assessee and the distributor companies has not been shown. In our view, the ratio of these judgment of the Apex Court is applicable to the facts of this case. - Demand set aside - Decided in favour of assessee.
|