TMI Blog2009 (10) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent parties and proposing demand of duty and imposition of penalties. Commissioner by his impugned order accepted the valuation for the period 17-8-2001 to 31-3-2005 noting that other non-related parties were also getting the discount of 48%. In addition, he imposed penalty of Rs. 40 lakhs each on Shri Rajiv Gambhir and Shri Sanjay Gambhir under Rule 26 of Central Excise Rules, 2001 and Rule 26 of Central Excise Rules, 2002. Held that- (a) The appellant-company and the partnership firm M/s. D.D. Sales Corporation are related persons and the sale prices of D.D. Sales Corporation is to be taken for the purpose of assessment and differential duty and interest on this ground is sustainable within the normal period of limitation. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons to the appellant-company and they were getting discount of 48% in respect of sales made to them and accordingly, show cause notice was issued proposing to adopt the sale prices of the said distributors to independent parties and proposing demand of duty and imposition of penalties. The appellant-company submitted that during the period up to 17-8-2001 they were selling not only through two distributors who were sought to be treated as related persons and also to other distributors at the same price. They also filed declarations dated 28-7-2000 and 17-4-2001 intimating their marketing pattern inter alia mentioning the sale through the various parties. Subsequently, no declarations were required to be filed by them. They also claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter granting 48% discount was also same as the price adopted for sale to D.D.S.C. and therefore, Rule 9 is not attracted. She submits that Section 4 of the Central Excise Act does not refer to clearances for home consumption and therefore, even in respect of export clearances made to Nepal the said rules are applicable as they are paying duty and clearing to Nepal. She also submits that SSI exemption under Notification No. 8/2003 and similar Notifications have treated clearances made to Bhutan and Nepal on par with the clearances made to domestic market. She submits that there is no evidence of relationship between the appellant-company and D.D.S.C. which is partnership concern. Merely because some of the partners happen to be Directors in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the order of the Commissioner, and submits that in para 23.1.4 it has been held that the shares of the appellant-company are held only by members of Gambhir family; in para 28.1.8 it has been held that the appellant-company and the marketing firm come under the category of inter-connected undertakings in terms of Section 2(g) of MRTP Act, 1969; and in para 23-1-10 it has been held that appellant-company of the firm were in a position to make policies for their own profit and the appellant-company was subject to control by partners of marketing firms. He also draws our attention to para 23.2.5 wherein it has been held that partners of M/s. D.D.S.C. and S.S. Enterprises are relatives of the shareholders/Directors of the appellant-comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which existed between the appellant-company and the distributing firm. He has also dealt with in detail in paragraphs 23.1 to 23.3.19, the various evidences relied upon by him. He has accordingly come to the conclusion that the appellant-company and the distributor firm are related persons and have mutual interest in the business with each other. The learned Advocate has not been able to rebut the factual position based on which the Commissioner has come to the conclusion about the relationship. The fact that the three partners of distributing firm were having more than 40% shares in the appellant-company is not being disputed. The fact that entire shares of the appellant-company are held only by the relatives of directors of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed that some of the Directors are common in two distributors and prices are same for all the distributors. This factual position has not been rebutted. Under these circumstances, invocation of extended period and imposition of penalties are not warranted. Merely because after detailed examination of the shareholding pattern and various other evidences, the Department has come to the conclusion that the appellant-company and the distributing firm are related persons, same does not automatically lead to an inference that the appellant-company has wilfully suppressed the relevant details. We have not been shown any specific provisions under which they were required to furnish the details of shareholding and the like information to the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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