1999 (12) TMI 252

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..... Ltd. sold it to their dealers. The department took the view that assessment must be on the value at which the goods were sold by Rallis India Ltd. to their dealers. This view was taken on the ground that the assessee is a subsidiary company of Rallis India Ltd. Without entering a finding regarding relationship between Rallis India Ltd. and the assessee in this case, adjudicating authority relied on its finding in its order-in-original No. l/MP/88 dated 28-7-1988. In that order the adjudicating authority observed : "Charge in brief in all the show cause notices is that they sold their entire electrical fans manufactured by them to M/s. Rallis India Ltd., Bombay, who in turn sold to various customers. M/s. Rallis India Ltd. charged at highe .....

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..... presenting the appellant, relationship cannot be presumed unless the department succeeds in showing mutuality of interest. In support of this argument, learned counsel brought to our notice two decisions of the Bombay High Court, the case of Dawn Apparels Ltd. v. Union of India, 1989 (43) E.L.T. 401 and in the case of Ralliwolf Ltd v. Union of India, 1992 (59) E.L.T. 220. In the first case, learned single Judge of the Bombay High Court took the view that the mere fact that assessee happened to be the subsidiary of another company will not in any way go without establishing that the transaction between the subsidiary company and the other company was not at arms length. For a proper understanding of the law stated by the Bombay High Court, w .....

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..... interest between the two firms. He has not stated that the price at which the entire produce was sold was not a commercially acceptable one. He found relationship only on the ground of the assessee being a subsidiary company of Rallis India Ltd. This one ingredient by itself cannot be a justifiable ground in the light of the law stated by the Bombay High Court. 4.  In appeal No. E/750/91-A, the order-in-original passed by the adjudicating authority has been reversed by us. 5.  In view of the above circumstances, departmental authorities are directed to recompute the duty payable by the assessee as if it is not related to Rallis India Ltd. Consequential relief if any due to the assessee, will be paid in accordance with law. 6.&e .....

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