9911796707
TMI Blog1991 (7) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as M/s. International) or to other buyers. M/s. International, however, are their major buyers. When the appellants sell the goods directly to other buyers, invoices are issued by the appellants charging the prices at which M/s. International sell the said excisable goods to such independent buyers. However, for such direct sale to other buyers the appellants issue Credit Notes to the extent of price differential between their selling price to M/s. International and the invoice price charged by the appellants from such other buyers. The prices at which M/s. International sell the goods to such other buyers (independent buyers) are the prices at which they receive the goods from the appellants plus the element of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to why a penalty should not be imposed on them under the provisions of Rule 173Q of the Central Excise Rules. 1.5 On adjudication, the adjudicating authority has found that the appellants herein and M/s. International have common directors, namely, Dinesh B. Adalja and Dalip A. Parekh. Apart from the common directors, the other directors are relatives of one and another in the two companies. He has thus held that both the companies appear to be family concerns and are beneficiaries of their ventures. The benefits from both the concerns are shared by members of one and the same family. He has, therefore, in other words held that the appellants, namely M/s. ITEC and M/s. International are related to one and another in terms of Section 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant company and M/s. International are two Private Limited Companies and are therefore, separate entities. They cannot, therefore, be treated as related persons at all. He relies in his support on 1989 (41) E.L.T. 287 [ICIAM]. He has further urged that there is no evidence of flow back of any benefit to the appellants. Neither is there any evidence that M/s. International or the appellants have interest in the business of each other. 2.1 Rebutting the aforesaid plea of the learned Consultant, Shri Prabhat Kumar for the Revenue, has urged that mutuality of interest between M/s. International and the appellants is clear from the fact that commission is given by the appellants to M/s. International even in respect of independe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seller but also that the other directors in the two companies are relatives of one and another. This finding has not been rebutted by the appellants. It has also been held by the adjudicating authority that both the companies are family concerns and are beneficiaries of their ventures and that the benefit of both the concerns are shared by members of one and the same family. The question that arises for consideration is whether in the aforesaid facts and circumstances the appellants and M/s. International can be treated as "related persons". Answer to this question is found in the judgment of Bombay High Court in Cosmos case referred to by the learned JDR, which in turn relies on Supreme Court's judgment in the case of UOI v. Kantilal Chu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... International. While this fact of sale may create a one way interest of M/s. International in the business of the appellants, it is not indicative of the interest of the appellants in the business of M/s. International. Once the goods are sold by the appellants to M/s. International, they are not concerned whether the goods are further sold by M/s. International or not. Hence we hold that even in the given circumstances M/s. International and the appellants cannot be treated as related persons. 3. Next issue is regarding the show cause notice being barred by time. The appellants' learned Consultant has contended that the department was fully aware of the Notification 71/78 being availed of by the appellants. The price had also been declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 years cannot be invoked by the department in this case. Accordingly, the demand of duty made in terms of the impugned order would be barred by time, inasmuch as the show cause notice was issued on 13-4-1982 for the period 11-4-1978 to 29-9-1979. Demand of duty is, therefore, set aside. 4. Another issue raised by the learned Consultant was that the Notification 71/78 did not envisage that the benefit of exemption must necessarily be passed by the manufacturers to the customers. Reliance has been placed by him on the judgment of Delhi High Court in the case of Modi Rubber India Ltd. v. UOI [1978 (2) E.L.T. 127] as well as on Bombay High Court's judgment in the case of Apollo Tyres Ltd. v. UOI [1980 (6) E.L.T. 228]. 4.1 We need not dwell o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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