Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2019 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (12) TMI 1126 - CESTAT MUMBAIValuation - related party transaction or not - Mutuality of interest - Section 4(3)(b)(iv) of Central Excise Act, 1944 - price at which the P&P medicines sold by them to sub-distributor be considered as the transaction value for the purpose of determination of duty or not? - HELD THAT:- It is not in dispute that the Appellants are manufacturing P&P medicaments on job work basis for M/s Adelphi Pharmaceuticals and M/s Heilen Lab under loan licence agreement. It is also not in dispute that the entire quantity of the goods manufactured on job work basis are sold to the Appellant being appointed as sole selling Agent of M/s Adelphi Pharmaceuticals and M/s Heilen Lab at a price 30% less than the price at which the Appellant M/s Sigma Laboratories sold to the sub-distributors. It is the responsibility of the Appellant M/s Sigma Laboratories, to arrive at and fix the MRP of the P&P medicines bearing the brand name of M/s Adelphi Pharmaceuticals and M/s Heilen Lab - Also, it is not in dispute that majority share holding in the Appellant’s company is held by Shri Dilip S. Coulagi in association with his family members and only minor portion is held by the Financial Institution i.e.IDBI. In the present case, the mutuality of interest between the Appellant M/s Sigma Laboratories and other two proprietary-ship concerns viz. Adelphi Pharmaceuticals and M/s Heilen Laboratories is apparent inasmuch as the proprietors of these two companies are also the Managing Director and Director of the Appellant company, the family as a whole control the shareholding of the Appellant Company. Besides, the important factor to note is that the P&P medicine manufactured on job work basis using the brand names of loan licensors viz. M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories are sold to the Appellant at a price which is fixed by the Appellantafter extending 30% discount from the said price. The said discounted price is considered in arriving at the transaction value between the Appellant and the loan licensors viz. M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories. This itself shows that the quantum of profit and benefit had been mutually shared by the two companies viz. M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories with that of the Appellant. Therefore, the price at which the Appellant sold the manufactured goods to the subdistributor be considered as a transaction value as per Sec.4(1)(b) of CEA,1944 read with Rule 9 of The Central Excise Valuation Rules,2000. Therefore, the learned Commissioner has rightly confirmed the differential duty short paid by the Appellant. Extended period of limitation - Penalty - HELD THAT:- The Appellant could not show that the agreement between them and M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories had been disclosed to the Department indicating that the fixation of price for the sellers M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories was within the domain of the Appellant. Thus, invoking of extended period in confirming duty is justified - the penalty imposed on the Managing Director is reduced to ₹ 25,000/-. Appeal allowed in part.
|