Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Commissioner of Central Excise, Hyderabad Versus M/s. Detergents India Ltd. & Another

2015 (4) TMI 358 - SUPREME COURT

Valuation - normal price - Related person / party - wholesale purchaser - Applicability of Section 4(1)(a) proviso (iii) and Section 4(4)(c) of the Central Excise and Salt Act as they stood prior to the 2000 amendment of Section 4 - Evasion of duty - Held that:- “arrangement” spoken of in the proviso must be something by which the assessee and the related person “arrange” that the goods are sold at something below the normal price, so that tax is either avoided or evaded by such arrangement. Sec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l three considerations are cumulatively met that proviso (iii) can be said to be attracted.

When we come to the definition of “related person” the legislature has used a well known technique. It first employs the expression “means” and states that persons who are associated with the assessee so that they have a direct or indirect interest in the business of each other would get covered. The definition then goes on to use the expression “and includes” thereby indicating that the legisl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

“relative” would show that the relative need not be a person who is so associated with the assessee that they have mutual interest in each other’s businesses. If that were the case, the expression “relative” in the second part would be otiose inasmuch as a relative would be subsumed within “person” in the first part. Thus, “relatives” would also be “persons” who are so associated with the assessee that they have a mutual interest in each other’s businesses. The legislature by application of a de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

price paid by Shaw Wallace to Detergents India Ltd. This being the case, it is clear that on facts here there is no “arrangement” between Shaw Wallace and Detergents India Limited to depress a price which is otherwise at arm’s length. Though this fact is pleaded expressly before the Commissioner as pointed out above, the Commissioner’s order does not contain any finding based on this fact. On the other hand, there are copious findings as to how Shaw Wallace and Detergents India Limited are rela .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

predominance of sales by Detergents India Limited to Shaw Wallace. As has been pointed out above, only 10% of its manufacturing capacity has been sold to Shaw Wallace, 90% being sold to Hindustan Lever Limited. For this reason also, proviso (iii) does not get attracted.

Further, the single most relevant fact, namely, that Shaw Wallace paid for the same/similar goods to unrelated suppliers at a price lower than the price paid by Shaw Wallace to DIL, has not been adverted to at all by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mendment of Section 4. In short, these appeals deal with the definition of related person and the price at which valuation is to take place if sales are made to related persons in the course of wholesale trade. 2. It is important to note that the assessee, M/s Detergents India Limited, is the same in all the appeals, which arise out of different show cause notices for periods ranging from 1.3.1992 to September 1997. Detergents India Limited later changed its name to Henkel Marketing India Limite .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed 22.4.2003. 4. By a separate show cause notice dated 26.3.1997 for the period 1.3.1992 to 31.3.1995, the Commissioner by an order dated 31.8.1999 confirmed a demand of ₹ 1,12,42,499/- and also confiscated land, building, plant and machinery, and further ordered redemption of the same in lieu of confiscation on payment of a fine of ₹ 5,00,000/-. Penalties of ₹ 5,00,000/- each were imposed on the assessee, namely, DIL and on its holding company Shaw Wallace Company Limited. An .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

wholesale purchaser Hindustan Lever and another. The Technical Member, therefore, remanded the matter for a proper adjudication on facts. The Legal Member, on the other hand, found in favour of the assessee finding that the issue in the present appeals was covered by the judgment of Union of India v. Atic, (1984) 3 SCC 575 and Raliwolf Limited v. Union of India, 59 ELT 220 Bombay (1992). In view of the difference of opinion between the members, the points of difference were placed before a thir .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

L cannot be said to be related to DIL within the meaning of this expression as used in Section 4(1)(a) as no mutuality of interest between the two companies has been established in this case. None of the commonalities suggested by the Ld. SDR in his bid to set up a relation between the two companies would, individually or collectively, amount to mutuality of interest expounded by the Apex Court. The decisions cited by him are easily distinguishable. On the other hand, the decisions cited by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ct is that there was no mutuality of interest between DIL and SWCL and hence they were not related persons within the meaning of Section 4(1) (a) of the Act. The fact alleged by the department in the show cause notice did not exist at all to be suppressed by the notice. Therefore, the extended period of limitation was not invocable in this case. I agree with Ld. Member (J) on this score also. 8. In the result, the appeals filed by DIL and SWCL have to be allowed and the Revenue s appeal to be re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

company and subsidiary company contained in the Companies Act, 1956. 90% of the manufacturing capacity of Detergents India Limited was to manufacture various products for Hindustan Lever Limited which were then branded with Hindustan Lever names in small packs. A processing charge was paid by Hindustan Lever Limited for this job work, and it is clear that different processing charges were paid depending upon the size of the product and the product itself. The excess 10% capacity which was not mo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

companies was less than the price paid to Detergents India Limited. This can be found as a fact in the Commissioner s order dated 7.11.2000 in Civil Appeal Nos.6166-6168 of 2004 in which the following fact was pleaded before the learned Commissioner:- SWC procures only a part of its requirement from DIL and there are various other independent manufacturers like M/s Deepti Chemicals, Kanpur, M/s Geeta Chemicals, Unnao, M/s Kari Detergents, Muzaffarnagar, M/s Standard Surfactants, Kanpur, M/s Jain .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f subsidiary and principal in the absence of any evidence of low price having been charged or any favourable treatment accorded. In the present case, the Department has not produced any material to show that their price to SWC is not the normal price. 6. It was also pleaded that processing charges of different products were different. This is to be found in the very show cause notice dated 26.3.1997 with which we are concerned as follows:- 3.6 File bearing Nos. 45 and 71 seized from the factory .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat the processing charges paid by M/s. HLL to M/s. DIL is ₹ 1,200 per MT upto 1994 and later M/s. HLL reduced the processing charges to ₹ 1125 per MT: that for the goods supplied to M/s. SWC, M/s. DIL used to file the price list with the Central Excise Department after mutually agreeing with M/s. SWC taking into account the raw material landed cost and the processing charges; that every month M/s. DIL were sending landed cost of raw material and packing material monthwise to M/s. SW .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

essing charges for both Chek detergent powder and sunlight detergent powder are similar; that the packing style for Sunlight detergent powder varies from packing of Chek detergent powder, the difference being Chek Powder was packed in bulk quantities more and in the case of Sunlight powder the entire packing was in 500 Gms. Only; that in respect of detergent cakes made for M/s. SWC and M/s. HLL, the processing is similar and the size of the cake was given according to the requirement; that howev .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n borne by the holding Company Shaw Wallace; processing charges paid by Shaw Wallace to DIL is less than processing charges paid to Hindustan Lever; employees of Shaw Wallace and its subsidiaries were freely transferred from one company to another; depots of Shaw Wallace and DIL were in the same premises; DIL sends monthly newsletters to Shaw Wallace showing production, despatches, purpose, technical problems, quality problems, details of power consumption etc. - and Shaw Wallace fixes the price .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on of related person under Section 4(4)(c) gets attracted and proviso (iii) to Section 4(1)(a) in turn gets attracted and therefore it is the price at which Shaw Wallace and Company sells the self same goods to its customers that is the price that is to be taken into account on the facts of the present case. 8. Shri Lakshmikumaran, learned counsel for the appellants has argued that even though Shaw Wallace and DIL may be holding and subsidiary companies, yet on a true construction of Section 4(4 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he present case, there is no arrangement between Shaw Wallace and DIL which has led to any depression in the normal price at which such goods are sold. Also, since only 10% of the production of DIL is sold to Shaw Wallace, the goods are not generally sold to Shaw Wallace. 9. To appreciate the aforesaid controversy, it is necessary to set out Section 4 as it existed before its amendment in 1973. Section 4 then read: 4. Determination of value for the purposes of duty. - Where, under this Act, any .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

est place where such market exists, or (b) where such price is not ascertainable, the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production, or if such article is not sold or is not capable of being sold at such place, at any other place nearest thereto. Explana .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aluation of excisable goods for purposes of charging of duty of excise.-(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be- (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price, being the maximum, fixed under any such law, then, notwithstanding anything contained in clause (iii) of this proviso, the price or the maximum price, as the case may be, so fixed, shall, in relation to the goods so sold, be deemed to be the normal price thereof; (iii)where the assessee so arranges that the goods are generally not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uch goods is not ascertainable for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed. (2) Where, in relation to any excisable goods the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of del .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty, from where such goods are removed; (c) related person means a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company, a relative and a distributor of the assessee, and any sub-distributor of such distributor. Explanation.-In this clause holding company , subsid .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e excisable goods are wrapped, contained or wound; (ii) does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale; (e) wholesale trade means sales to dealers, industrial consumers .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

presumption that a sale to a related person would be at a price which is not the sole consideration for the sale. 10. Proviso (iii) then deals with the price that is to be taken into consideration in case sales are made to related persons. Three basic ingredients are necessary before proviso (iii) gets attracted. The first ingredient is that the assessee must arrange that goods are sold by him in a particular manner. The second ingredient is that such arrangement must be such that the goods are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

shows that such goods must predominantly be sold by the assessee to or through the related person - in mathematical terms, sales that are to or through a related person must consist of at least 50% of the goods that are manufactured and sold. The expression to or through a related person again goes back to the arrangement and is another way of saying that such sale can be effected directly to or indirectly through such related person. It is only when all three considerations are cumulatively me .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

various persons that would not otherwise have so been included. These include a holding company, a subsidiary company, a relative and a distributor of the assessee and any sub-distributor of such distributor. The necessity for including holding and subsidiary companies as defined under the Companies Act, 1956 is to lift the corporate veil in order to get to the economic realities of the transaction. 13. Now to the case law. In Union of India v. Bombay Tyre International Ltd., (1984) 1 SCC 467, S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aracterised by the same dichotomy as that observable in the old Section 4. It was not the intention of Parliament, when enacting the new Section 4 to create a scheme materially different from that embodied in the superseded Section 4. The object and purpose remained the same, and so did the central principle at the heart of the scheme. The new scheme was merely more comprehensive and the language employed more precise and definite. As in the old Section 4, the terms in which the value was define .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m where such goods are removed. The judicial construction of the provisions of the old Section 4 had already declared that the price envisaged under clauses (a) and (b) of that section was the price charged by the manufacturer in a transaction at arm's length. After referring to several cases, some of which have already been mentioned here earlier, this Court pointed out in Voltas Limited [(1973) 3 SCC 503 : 1973 SCC (Tax) 261 : AIR 1973 SC 225 : (1973) 2 SCR 1089] : (SCC p. 509 para 20) the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m are fair and reasonable and were arrived at on purely commercial basis. 33. That was also the view taken in Atic Industries Ltd. [(1975) 1 SCC 499 : 1975 SCC (Tax) 135 : AIR 1975 SC 960 : (1975) 3 SCR 563] The new Section 4 makes express provision in that behalf. Under the new Section 4 also, it is necessary to take the price charged by the manufacturer as one which is unaffected by any concessional or manipulative considerations, and therefore the normal price mentioned in the new Section 4(1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lated person and the price is the sole consideration for the sale . The pre-amended Section 4 was understood in Voltas s case by this Court to mean that the wholesale cash price can only be ascertained on the basis of arm s length transactions. If there is a special or favoured buyer like a relative of the manufacturer to whom a specially low price is charged because of extra commercial considerations, such price cannot be the price referred to in Section 4(1)(a). Taking a cue from the fact that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e it is clear that the expression where the buyer is not a related person and the price is the sole consideration for the sale is to be read conjunctively as meaning that because the buyer is a related person, the price usually ceases to be the sole consideration for the sale. This merely raises a rebuttable presumption. Once the presumption is rebutted and it is shown that even in the case of a buyer who is a related person, the price is the sole consideration for the sale and is not a speciall .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction 4 is that transactions at arm s length between manufacturer and wholesale purchaser which yield the price which is the sole consideration for the sale alone is contemplated. Any concessional or manipulative considerations which depress price below the normal price are, therefore, not to be taken into consideration. Judged at from this premise, it is clear that arrangements with related persons which yield a price below the normal price because of concessional or manipulative considerations .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

surdity. Where it is proved that the same price is paid by related persons as well as arm s length purchasers (who are unrelated) for the same goods, in the case of the former the higher price paid by purchasers from the related person would be the price on which excise duty would be calculated which would be more than the normal price under Section 4(1)(a). Such a result is not contemplated by the amended Section 4(1) (a), which must therefore be read in the manner indicated above. 16. So far a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

973 SC 225 : (1973) 2 SCR 1089] and Atic Industries Ltd. [(1975) 1 SCC 499 : 1975 SCC (Tax) 135 : AIR 1975 SC 960 : (1975) 3 SCR 563] It is true, we think, that the new Section 4(1) contains inherently within it the power to determine the true value of the excisable article, after taking into account any concession shown to a special or favoured buyer because of extra-commercial considerations, in order that the price be ascertained only on the basis that it is a transaction at arm's length. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion declaring that certain specified categories of transactions fall within the tainted class, in which case an irrebuttable presumption will arise that transactions belonging to those categories are transactions which cannot be dealt with under the usual meaning of the expression normal price set forth in the new Section 4(1)(a). They are cases where it will not be necessary for the Revenue to examine the entire gamut of evidence in order to determine whether the transaction is one prompted by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d that the assessment on the manufacturer by reference to the sale price charged by his distributor is wholly incompatible with the nature of excise , and we are referred to Atic Industries Ltd. [(1975) 1 SCC 499 : 1975 SCC (Tax) 135 : AIR 1975 SC 960 : (1975) 3 SCR 563] Now, it is a well known legislative practice to enact provisions in certain limited cases where an assessee may be taxed in respect of the income or property truly belonging to another. They are cases where the Legislature inter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

employs such a device, and the liability is attached without qualification, it is reasonable to infer that an irrebuttable presumption has been created by law. Such provisions have been held to be within the legislative competence of the Legislature and as falling within its power of taxation, and reference may be made to Balaji v. ITO [AIR 1962 SC 123 : (1962) 2 SCR 983 : (1961) 43 ITR 393] ; Navnitlal C. Javeri v. CIT [AIR 1965 SC 1375 : (1965) 1 SCR 909 : (1965) 56 ITR 198] and Punjab Distil .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the provision from the residuary Entry 97 of List I as a non-descript tax the attempt must fail because there is no charging section in the Central Excises and Salt Act empowering the levy of such non-descript tax nor any machinery provision in the Act for collecting such a tax. The charging provision and the machinery provisions of the Act, it is pointed out, deal exclusively with excise duty and not with any other tax. The validity of the provision is assailed also on the ground that it v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mean a distributor who is a relative of the assessee. It will be noticed that the Explanation provides that the expression relative has the same meaning as in the Companies Act, 1956. As regards the other provisions of the definition of related person , that is to say, a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company. . . , we think that the provision shows a suffici .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

relationship of a holding company and a subsidiary company, and to Juggi Lal Kamlapat v.C.I.T. [AIR 1969 SC 932 : (1969) 1 SCR 988 : (1969) 73 ITR 702] where this Court held that the veil of corporate entity could be lifted to pay regard to the economic realities behind the legal facade, for example, where the corporate entity was used for tax evasion or to circumvent tax obligation. 17. On a reading of the aforesaid paragraphs, it is clear that proviso (iii) would be referable only to tainted t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

such companies can be lifted so that economic realities behind the legal façade can be looked at so that tax is not evaded or avoided. 18. Some other decisions may be taken note of at this stage. In Flash Laboratories Limited v. Collector of Central Excise, New Delhi, (2003) 2 SCC 86, the appellant was a subsidiary company of M/s Parle Products Limited. M/s Parle Biscuits Limited is also a subsidiary company of M/s Parle Products Limited. What was in question in that case was the relatio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ry company of the assessee i.e. M/s Flash Laboratories Limited. This being the case, this Court held: 7. Having regard to the above decision and the plain meaning of the definition of related person , it is to be noticed that the appellant is a subsidiary company of Messrs Parle Products Limited and Messrs Parle Biscuits Limited is also a subsidiary company of Messrs Parle Products Limited. Therefore, the relationship between the appellant and Messrs Parle Biscuits Limited, though indirect, they .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

llant's product, namely, Prudent toothpaste . This judgment, therefore, is an authority only for the application of the first part of Section 4(4)(c). It is in this context that the Court held in paragraph 5 that there must be mutuality of interest between two persons who are both subsidiaries of a particular holding company. 19. In Commissioner of Central Excise Bombay v. Universal Luggage Manufacturing Company Limited, (2005)190 ELT 3, this Court found as a matter of fact that the assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

II, Chennai v. Beacon Neyrpic Ltd., 2006(193) ELT 16, this Court in a short two paragraph order held: 1. Assuming that the assessee was related to its subsidiary company i.e. M/s Best & Crompton Ltd. (BCL), this by itself would not be sufficient for the purpose of invoking the Central Excise (Valuation) Rules, 1975 read with Section 4(1)(a) of the Central Excise Act, 1944. The Department would have to go further and show that the relationship has introduced an element other than purely comme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

paid by the Railways (an arm s length purchaser) was the same as the price paid by ITCL, the price paid by the holding company to its subsidiary was taken to be a price on which excise duty would be calculated. 22. Since the Tribunal in the judgment under appeal has referred to and relied upon Raliwolf v. UOI, 59 ELT 220 Bombay (1992), we must refer to the same. The Bombay High Court in that judgment construed Section 4(4)(c) as follows: 31. We are not inclined to accept the contention of the D .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndly, the price charged should not be normal price but the price lower to the normal price, and that extra-commercial considerations have reduced the normal price. Thirdly, the alleged related person should be related to the assessed as defined in Section 4(4)(c) of the said Act. It is only if the above three conditions are satisfied, then alone it can be said that the third proviso to Section 4(1)(a) is applicable. (b) The first part of the definition of related person as mentioned in Section 4 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld be rendered meaningless. It is well-settled rule of interpretation that the Legislative mandate should be so read that no word used by the Parliament should be rendered nugatory. Reading the section as a whole it is clear that merely because a company is the subsidiary of holding company, ipso facto, it cannot attract Section 4(4) (c). It must be further established that each has interest in the business of the other. It must be further established that the transaction in question is not base .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the aforesaid paragraph. As has been stated by us above, means and includes is a legislative device by which the includes part brings by way of extension various persons, categories, or things which would not otherwise have been included in the means part. If this is so, obviously both parts cannot be read conjunctively. What is in the includes part is relatable only to the subject that is to be defined and takes within its sweep persons, objects, or things which are not included in the first .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n clause persons, objects, or things that would not otherwise be included within the means part. 24. The High Court is also wrong in saying that its view is supported by the judgment of this Court in Union of India v. Atic Industries Ltd., (1984) 3 SCC 575. On facts, Atic s case did not deal with holding and subsidiary companies. Atul Products Limited held 50% of the share capital of Atic Industries which would not enable Atul products to be called the holding company of Atic Industries. Further .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

definition of the term related person and the assessable value of the dyes manufactured by the assessee for the purpose of excise duty was, therefore, liable to be determined with reference to the price at which the dyes were ordinarily sold by Atul Products Limited and Crescent Dyes and Chemicals Limited. This view taken by the Assistant Collector was set aside by the High Court on the ground that the assessee on the one hand and Atul Products Limited and Crescent Dyes and Chemicals Limited on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e only part of the definition of related person in clause (c) of sub-section (4) of Section 4 on which he could rely was the first part which defines related person to mean a person who is so associated with the assessee that they have interest directly or indirectly in the business of each other . The second part of the definition which adds an inclusive clause was admittedly not applicable, because neither Atul Products Limited nor Crescent Dyes and Chemicals Limited was a holding company or a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act, 1956 is defined as follows:- 6. Meaning of relative .-A person shall be deemed to be a relative of another if, and only if,- (a) they are members of a Hindu undivided family; or (b) they are husband and wife; or (c) the one is related to the other in the manner indicated in Schedule I-A. Schedule I-A. [See Section 6(c)] LIST OF RELATIVES 1. Father. 2. Mother (including step-mother). 3. Son (including step-son). 4. Son's wife. 5. Daughter (including step-daughter). 6. Father's fathe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ive would show that the relative need not be a person who is so associated with the assessee that they have mutual interest in each other s businesses. If that were the case, the expression relative in the second part would be otiose inasmuch as a relative would be subsumed within person in the first part. Thus, relatives would also be persons who are so associated with the assessee that they have a mutual interest in each other s businesses. The legislature by application of a de jure test has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the price paid by Shaw Wallace to Detergents India Ltd. This being the case, it is clear that on facts here there is no arrangement between Shaw Wallace and Detergents India Limited to depress a price which is otherwise at arm s length. Though this fact is pleaded expressly before the Commissioner as pointed out above, the Commissioner s order does not contain any finding based on this fact. On the other hand, there are copious findings as to how Shaw Wallace and Detergents India Limited are rel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version