TMI Blog1999 (3) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... are : M/s Xerographics Ltd. engaged in the manufacture of Plain Paper Copier Machines with the Trade Mark Ricoh Murphy , were selling their products through two other Companies, viz., M/s Murphy (India) Ltd., M/s Mecotronics (P) Ltd. By Show Cause Notice dated 25-2-1987 appellants and the afore-mentioned two companies were asked to show cause against various charges. It was alleged that appellants (M/s Xerographics) were evading duty by under-valuation. It was alleged that M/s Xerographics and the other two Companies were related persons within the meaning of Section 4(4)(c) of the Central Excise Act, 1944 and therefore the transactions between the appellants on the one hand and two distributor Companies on the other hand were not on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of Section 4(4)(c) of the Central Excise Act. Following case law was relied on in support : (1) M/s. Calcutta Chromotype Ltd. v. C.C.E., Calcutta [1998 (99) E.L.T. 202 (SC)] and M/s. Ralliwolf Ltd. v. Union of India [1992 (59) E.L.T. 220 (Bom.)]. Stressing the fact that the entire sales by the appellants to the two distributors were on retail basis he contended that there was no basis for the Collector for denying the deductions provided under Section 4 such as adjustments by way of freight and 10% commission on sales by the distributors and adjustment by way of deductions to arrive at wholesale price from retail credit price. It was also contended that the Collector had wrongly rejected the objections raised by the appellants about th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and each other. He further pointed out that the appellants had not disclosed the fact that Shri R.H. Thakkar, Quality Controller of M/s. Murphy (India) Ltd., and Shri S.G. Koppikar, R D Manager of Murphy (India) Ltd., who were nominated as Directors in the appellant Company by M/s. Murphy (India) Ltd., and S/Shri D.R. Desai and A.H. Kazi were appointed as Directors of the appellant Company at the instance of the Managing Director of M/s. Mecotronics Ltd. He submitted that in terms of the Companies Act, 1956 a Company shall be deemed to be subsidiary of another, if one Company had control over the composition of the Board of Directors of another Company. Having regard to these facts he submitted that the impugned order suffers from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding (9.22%) in the appellant company. Further, the fact is also not in dispute that both Murphy (India) Ltd., and Mecotronics have appointed Directors in the appellant s Company. These and other instances like common use of premises and personnel referred to by the Collector in the impugned order in our view, adequately establish direct or indirect business interest between the manufacturer and distributor as envisaged in the definition of related person in Section 4(4)(c). Therefore the Apex Court decision in Calcutta Chromotype case does not appear to help the appellants in the present case. 7. Ld. Counsel had also placed reliance on the Bombay High Court decision in Ralliwolf Ltd. v. Union of India - [1992 (59) E.L.T. 220] wherein i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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