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TMI Blog2009 (7) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Act, 1944 and also imposed equal amount of penalty on MSO and the penalty of Rs. 3 lakhs on Shri R.S. Gandhi, Director of the company. Both the appellants are in appeal against the impugned order of the Commissioner (Appeals). 2. Shri S.R. Dixit, learned Advocate submits that the appellants are engaged in the manufacturing of Lubricating Oils, which are chargeable of duty on the basis of MRP having been notified under Section 4A of the Central Excise Act, 1944 (Act for short). In respect of bulk sale of lubricating oil, the value is arrived at under Section 4 of the Act. MSO clears lubricating oil in bulk to MTL and it has been held in the impugned order that MTL is to be treated as related person within the meaning and scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended in year 2000, the principles to determine whether the purchaser is related to the seller remain the same and in addition to the relationship specified in the Section, mutuality of interest is also required to be established. He submits that in this case the mutuality of interest has not at all been established. Each and everyone of the ground for framing the basis of the conclusion of the lower authorities to come to the conclusion that units are related to each other, have been considered and rejected as not valid by various judgments. 5. In addition as an alternative submission, he also submits that in this case the period of dispute is from June, 2002 to March, 2003 whereas show cause notice was issued in October, 2004. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since for calculation purpose the higher quantity cleared by the MTL has been taken into account. 6. The learned DR, on the other hand, submits that: - (i) Most of the clearances are through the related person. (ii) The employees have admitted that they have been working for another company even when they were employed by one company. (iii) Shri R.S. Gandhi is incharge of operation of both the companies. Many time MLP pays money to MSO, which is due from the MTL. He submits that in view of the above circumstances, the lower authorities' decision holding that corporate veil is to be lifted since all the benefits stay within the family irrespective to the fact as to which of the company sales the goods, has to be upheld. 7. We have con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otorol Technologies Ltd., Halol with no official status in the said company. Shri Rajendra Gandhi, Vice President (Marketing) and Shri H.S. Nagaraj, Manager (Sales & Administration) of M/s. Motorol Technologies Ltd. are looking after the work of M/s. Motorol Lubricants (P) Ltd., which is a marketing agency of the assessee company as well as M/s. Motorol Technologies Ltd.; (v) the price list of automotive products manufactured by the assessee company and marketed by M/s. Motorol Technologies Ltd. is given by Shri H.S. Nagaraj, Manager (Sales & Administration) on a letter head of M/s. Motorol Lubricants (P) Ltd., which clearly shows the inter-relationship of the units; (vi) funds of the assessee company is frequently used for payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concept of related person and adoption of price charged by the related person as basis for arriving at the assessable value arises only when the assessee so arranges that all the goods are sold by him only through the related person. Nowhere there is a finding to this effect in the order of the lower authorities. No evidence has been gathered to show that all the shares of the three companies are owned by the only family to support the conclusion that the profits may by any of the companies would stay within the family only and therefore, the corporate veil had to be lifted. Even though several grounds have been given, none of these grounds show that there is a mutuality of interest between the companies and, there is no clear finding on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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