TMI Blog2009 (7) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is much lower, there is no detailed discussion to show how much lower is the price, whether it is much beyond the normal commercial transactions between the purchaser and buyer. There is no finding of a flowback. There is no evidence to show that all the shares are owned by the family members and no evidence to show that the price charged by the MSO to MTL is not normal. Therefore, we find that the evidence relied upon by the lower authorities are not conclusive enough to come to the conclusion that the MSO and MTL are related persons. - We find that the evidences referred to by the department are not sufficient to come to the conclusion and, therefore, on the ground of limitation also appellants succeed. Once, the duty demand is not uph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in grounds on the basis of which it has been held that both the companies are related persons are: - (i) Shri S.K. Gandhi and his son Shri R.S. Gandhi are Directors in MSO, whereas Shri R.S. Gandhi is a Director in MTL. (ii) Both are manufacturing automobile oils with the same brand name. (iii) The brand name "MOTOROL" is unregistered brand name owned by M/s. Motorol Lubricants (P) Ltd., a marketing agency of MTL and MSO. (iv) Both are group companies of 'Motorol Group' and persons employed by one company are also looking after the work of the other company. (v) All the companies are located in the same premises and use common telephone, fax, websites etc. (vi) Funds of appellant unit MSO is frequently used for payment of MTL an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the several other decisions of the Tribunal in concept of related person would not be applicable to them and therefore, extended period could not have been invoked in this case. He also submitted that for levying of excise duty on the basis of the price charged by the related person, Rule 9 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, hereinafter referred to as Valuation Rules, would be relevant and the rule is attracted only where the assessee so arranges that the excisable goods are not sold by him only to/through related person, who is related, the value of the goods at which related person sails the goods becomes the normal price under Section 4. He submits that in this case, the departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons and, therefore, the price charged by MTL should be the assessable value. For this purpose, the show cause notice had cited nine grounds in support of its argument and we find that the very same nine grounds have been reproduced in the findings by the original adjudicating authority for coming to the conclusion that the both the companies are related persons. Commissioner (Appeals) has upheld the order of the original adjudicating authority. We reproduce these grounds as under: - "(i) Shri S.K. Gandhi and his son Shri R.S. Gandhi are directors in assessee company whereas Shri R.S. Gandhi is a Director in M/s. Motorol Technologies Ltd. and have interest, directly or indirectly in the business of each other; (ii) both are manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vii) no regular payments are received by the assessee company for the goods sold to M/s. Motorol Technologies Ltd. and at the end of the year the outstanding amount to be recovered from M/s. Motorol Technologies Ltd. is adjusted against the payments to be received from M/s. Motorol Lubricants (P) Ltd. as can be seen from the ledge account wherein an amount of Rs. 91 lakhs in the year 2002-2003 and Rs. 1.5 crores in the year 2003-2004 have been so adjusted; (viii) the assessee company is giving finished goods in bulk quantities to M/s. Motorol Technologies Ltd. on loan basis for repacking into smaller packs which have been cleared on payment of duty to M/s. Motorol Lubricants (P) Ltd. for trading; the assessee company M/s. Motorol Technolo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is a flowback or the price charged is very low. While it has been mentioned that the price charged is much lower, there is no detailed discussion to show how much lower is the price, whether it is much beyond the normal commercial transactions between the purchaser and buyer. There is no finding of a flowback. There is no evidence to show that all the shares are owned by the family members and no evidence to show that the price charged by the MSO to MTL is not normal. Therefore, we find that the evidence relied upon by the lower authorities are not conclusive enough to come to the conclusion that the MSO and MTL are related persons. 9. In any case, we find strong force in the arguments advanced by the learned Advocate and an alter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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