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TMI Blog2005 (3) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... for 2/3 wheeler vehicles) were sold to them. SATL also manufactured and sold various types of tyres and tubes etc. to M/s. Ceat India Limited (for short Ceat) under their brand name. During the period after 25-8-1998 and upto 30-6-2000 around 36% of the tyres and tubes (other than for 2/3 wheeler vehicles) were sold to Ceat. 1.2 The prices at which SATL sold the goods to CEAT and Goodyear were agreed between the parties on the basis of off-take agreements entered. According to the terms of the agreement the price of the goods was to be arrived at as cost of production plus 1.5% profit for goods with brand names Ceat /and Goodyear. 1.3 For the period from 1-3-1997 to 16-4-1998, Commissioner of Central Excise, Aurangabad, passed an Order-in-Original dated 11-5-2000 holding that Ceat and Goodyear were related person in terms of Section 4(4)(c) of the Central Excise Act, 1944 and the assessable value of the goods manufactured and sold by SATL to Goodyear and Ceat had to be determined in terms of clause (iii) of the proviso to Section 4(1)(a) based on the price at which Ceat and Goodyear had sold the goods to their wholesale buyers. The appeal No. E/2721 to 2724/00 filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not holding any share in SATL. (iii) SATL filed appeal against the aforesaid order-in-original to Commissioner of Central Excise (Appeals). The Commissioner (Appeals) after hearing the appeal passed the impugned Order-in-Appeal dated 19-10-2001 holding that:- (a) Both Ceat and Goodyear were not related person during the period from 17-4-1998 to 25-8-1998. (b) Goodyear and SATL are to be treated as related person after 25-8-1998 since Goodyear, USA had purchased all the shares which were held by Ceat in SATL. Therefore, Goodyear, USA had become holding company of SATL. (c) The transportation charges incurred from the place of sale to the place of delivery and interest on receivable are to be deducted from the price at which Goodyear India Limited had sold the goods in order to arrive at the assessable value. (d) Amortised cost of mould supplied by Goodyear and Ceat should be added to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng company also had been incurring expenses for sale promotion and advertisement for the sale of prudent branded toothpaste. The CEGAT in the Final Order dated 19-5-1994 had basically held that since the advertisement and sale promotion has been done by the holding company, they are related. The issue as to whether two subsidiary companies of the same holding company are inter se related in terms of erstwhile Section 4(4)(c) of the Central Excise Act, 1944 was not the issue involved in the aforesaid case. The entire case of the department as well as the finding of the CEGAT in the case of Flash Laboratories was that the advertisement and sale promotion for the prudent toothpaste were undertaken by the buyers and therefore they are related person. This decision therefore cannot be treated as laying down the ratio that two subsidiary companies of one common holding company are inter se related on the ground of mutuality of business interest between them. Further, in terms of the recent decision of Supreme Court in the case of Alembic Glass Industries Ltd. v. CCE reported in 2002 (143) E.L.T. 244, the shareholders of public limited company do not, by reason of their shareholding, have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the so-called relationship. Therefore, the price at which Goodyear sold the goods to their buyers cannot be treated as the basis for determination of the assessable value. In this regard, the following decisions are relied upon as per the impugned Order, Goodyear India Ltd. at the same price prior to and after 25-8-1998. SATL had been selling the goods to Goodyear India Ltd. at the same price prior to and after 25-8-1998. Therefore, the price at which goods were sold by SATL after 25-8-1998 has not been influenced by the relationship, if any. Hence the assessable value can be determined based on the sale price of SATL to Goodyear India Ltd. This view is fully supported by the following decisions : (a) Ralliwolf Ltd. v. U.O.I. [1992 (59) E.L.T. 220 (Bom)][para31] (b) Xerographers Ltd. v. CCE [1999 (108) E.L.T. 372 (Tribunal)] (c) Samtel Electron Devices Ltd. v. CCE [2000 (118) E.L.T. 262 (T-LB) = 2000 (38) RLT 484 (CEGAT-LB)] (d) Samcor Glass Ltd. v. CCE [2001 (130) E.L.T. 783 (Tri.) = 2000 (36) RLT 854 (CEGAT)] (Department's appeal against this decision was dismissed by Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are affixed with brand name "Ceat". The goods sold to Goodyear India Ltd. are affixed with "Goodyear" brand. However wether that alone would mean that the goods sold to Ceat Ltd. and Goodyear India Ltd. are different excisable goods, has to be reconsidered in light of the decision of CEGAT and the Hon'ble High Court : (i) Bata India Ltd. v. CCE [1986 (25) E.L.T. 559] para 8 at page 566. (ii) Namita Gautam v. CCE - 2002(141) E.L.T. 814 para 5. (iii) Bata India Ltd. v. Government of India & Ors. [1987 (30) E.L.T. 907 (Cal.) Para 18 at page 913. Once this issue is re-determined in the facts of this case then the entire goods sold by the appellants to Goodyear India Ltd. and Ceat Ltd. could to be treated as same excisable goods. Then in view of the above before the department can use the plea that "Goodyear" brand tyres and "Ceat" brand tyres are different goods and thus, seek to reject arguments of SATL, these facts have to be established and thereafter findings about non-applicability of clause (iii) of proviso to Section 4(1)(a) arrived. &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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