TMI Blog2013 (12) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... soning for such rejection is coming forward from Revenue - The conditions in the contract cannot be interpreted to mean that the price of the goods was influenced in any manner by the conditions - The conditions appear to be common among parties entering into contract for manufacture of such specialised items which cannot be sold to public at large and in respect of which some type of IPR may be involved. high margins are noticed in most cases were a small manufacturer manufactures goods under the brand name of a well-known company which is able to market the product - There is no legal provision under excise laws controlling the profit margin or the premiums that may accrue on brand name – Prima facie the Revenue has not made out a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.1,16,64,302/- was confirmed on M/s. Inova India under Section 11A(1) / 11A(4) of the Central Excise Act, 1944 along with interest under Sections 11AA/11AB of the said Act. Penalty of equal amount under Section 11AC of the said Act is also imposed. A separate penalty of Rs.25,00,000/- is also imposed under Rule 26 of the Central Excise Rules, 2002 on PRPL presently known as M/s. Roca Bathroom Products Pvt. Ltd. Who is the second applicant. 3. While confirming the demand the learned Commissioner has relied on the decision of the Tribunal in the case of Audi Automobiles Vs Commissioner of Central Excise, Indore reported in 2010 (249) E.L.T.124 (Tri.-Del). 4. Arguing for the applicants, the learned counsel submits that the applicants are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posit. 5. Opposing the prayer, the learned Authorized Representative for Revenue submits that the applicants were the sole manufactures of the item and PRPOL was the sole purchaser of the EFS and there was close relationship between the two as is evidenced from various terms of the contract dated 31.07.2001 and the same is reproduced in para 15.1 of the Order-in-Original. He points out that the products were being sold by PRPL at more than twice the price at which goods are sold by Inova. He argues that the high profit margin in the hands PRPL is indicative of suppressed value in the hands of Inova. 6. He also points out condition 20.3 of the contract which states that "on termination of the agreement whatsoever, M/s. Inova India shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Before proceeding to adopt valuation of the goods sold by Inova to PRPL under the Valuation Rules, reason why the transaction value cannot be accepted has to be recorded. No forceful reasoning for such rejection is coming forward from Revenue. The conditions in the contract, referred to by Ld. AR, cannot be interpreted to mean that the price of the goods was influenced in any manner by the conditions. These conditions appear to be common among parties entering into contract for manufacture of such specialised items which cannot be sold to public at large and in respect of which some type of IPR may be involved. The main point relied upon by the Revenue to prove their case is the high profit margin that is accruing to PRPL, while selling th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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