TMI Blog2003 (12) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 44,55,116/-. He directed confiscation of land and plant belonging to UEPL under Rule 173Q(2)(a) of the Central Excise Rules, 1944 and imposed redemption fine of Rs. 20 Lakhs. A penalty of Rs. 10 Lakhs was also imposed on UEPL. Appeal E/2638/98 which is the main appeal is at the instance of M/s. UEPL. The Commissioner had imposed penalty at the rate of Rs. 10 Lakhs on M/s. Uma Engineering Pvt. Ltd. M/s. Auto Looms India, M/s. Keyur Engg. Pvt. Ltd., M/s. Gayatri Engg. Works, M/s. New Auto Looms India Pvt. Ltd. Appeal Nos. E/2648/98, 2644/98, 2642/98, 2640/98 and 2646/98 are respectively at the instance of the above-mentioned parties. The Commissioner had imposed penalty at the rate of Rs. 5 Lakhs on Shri Rameshbhai U. Pandya in his ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sential parts like Chain, Pulley, Motor, etc., and that since the appellant had negotiated with the customers for complete machine and obtained full payment for complete machine, the appellant is deemed to be a manufacturer of a complete machine and would be liable to pay duty on the entire value of the complete machine. 4. It was the case of the appellant that it is a Private Limited Company engaged solely in trading activity having no factory or any premises for manufacture of any items whatsoever. Their entire business premises consist of an office area of 18 x 12 sft. They never had any factory or plant and machinery or technical know-how or technical staff to undertake any activity in the nature of any process of manufacture. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the above submission. There were also instances where UEPL had supplied only the essential parts bought out from open market without combination of supply of corresponding machine framework manufactured by the four parties. Relevant invoices are also relied on in support of the above submission. Appellants further pointed out that UEPL had supplied to its customers machine framework etc. which were manufactured by parties other than the four referred above. So also the four manufacturers referred above had supplied their product to customers directly without the intervention of UEPL. On certain occasions they had supplied complete machinery including bought out parts procured on their own. In support of the above contention reference w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Representative, on the other hand, would submit that the four manufacturing units being sister concerns of M/s. UEPL the demand against M/s. UEPL would be sustainable. Manufacturer noticees have manufactured textile machine and cleared the same in SKD condition to different customers through UEPL. Therefore, excise duty has to be paid on the value of the machine as a whole. 8. Certain facts are admitted in this case, namely, M/s. UEPL has no manufacturing unit. Manufacturing activity is carried on by 4 other units. In the show cause notice allegation was that UEPL had created 5 associated firms who are manufacturers of various types of textile machinery and parts thereof. On the other hand, finding of the learned Commissioner is that UE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leys, cylinder, chain were stated to have been supplied by M/s. UEPL. After referring to the relationship between the Directors and Proprietors of UEPL and other manufacturing units the Commissioner comes to the conclusion that they are all related, namely, husband-wife relation. Commissioner has further held that UEPL is a purely sister concern of the manufacturers of textile machine. If the sole selling agent is described as sister concern, these sister concerns cannot be considered as an independent customer. The Commissioner further states that the transaction between the manufacturer and the sole selling agent cannot be considered as one at arms length. They are to be treated as related person and, therefore, duty should have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modity. Therefore, the ratio of the decision of the Supreme Court in Narne Tulaman Manufacturers Pvt Ltd. v. CCE - 1988 (38) E.L.T. 566 (S.C.) sought to be relied on by the Departmental Representative will have no application in the facts of the case. In the present case, a private limited company, namely, UEPL is engaged in trading activity. It makes arrangement with manufacturing units to supply certain parts of textile machinery directly to the customers, purchase other components from market and directly supply to the customers. Under these circumstances it cannot be held that the value of bought out items and the parts purchased by the trading company are to be added to the assessable value. For the above reasons we come to the conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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