9911796707
TMI Blog2006 (6) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... duct at Rs. 12/- per Kg. Further scrutiny of records revealed that the appellants had taken unsecured loans of Rs. 20 lakhs, Rs. 35 lakhs and Rs. 35 lakhs on 31-3-1991, 31-3-92 and 31-3-93 from M/s. CPL no interest was paid by them to M/s. CPL on the unsecured loans. The Head Offices of both the appellants and M/s. CPL were located at 239, Mahalakshmi Layout, Bangalore. The Department proceeded against the appellants on the ground that the appellants and M/s. CPL are related persons. Five Show Cause Notices were issued. The Deputy Commissioner, Central Excise, Kanpur in his Order-in-Original, dated 22-5-2001 confirmed a demand of Rs. 12,86,996/- upon the appellant under Section 11A of the Central Excise Act, 1944. He relied on Tribunal's fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to address the question in the light of facts of the case and only thereafter he can come to any conclusion regarding the related person issue. Instead he has arbitrarily held that the appellants and M/s. CPL are related persons. (iii)The commissioner (A) in the impugned order has mechanically without application of mind upheld the Order-in-Original without even considering the facts of the case brought on record by the appellant and the statement of facts in his appeal dated 20-7-2001 filed before the Commissioner (A). (iv) On merits also it is possible to establish that the appellants and CPL are not related persons within the meaning of Section 4(4)(c) of the Act for the following reason: (a) The buyer company was not a partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of a total compensation of 1.277 crores, the appellant was paid approximately Rs. 63/- lakhs which is 50% of the compensation. Considering that the appellant had made a capital investment of Rs. 123 lakhs, appellant should have got a compensation of Rs. 92.4 lakhs. The capital advance and compensation transaction between CPL and the appellant was specific to the TISCO project and had nothing to do with the sale of carbon dioxide by the appellant to the CPL. The Adjudicating Authority has ignored this and has proceeded on a erroneous basis. (f) The fact that the buyer company entered into a contract with IFFCO a quasi government organization for purchase of CO2 at the rate of Ra. 3.50 per kg. Shows that the price of Rs. 4 per kg at whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity not appreciated all these facts in arriving at a decision. He has also completely ignored the Tribunal's decision. 7. A close reading of the Tribunal's order indicates that for the period .subsequent to 28-2-97, the question of related person has been kept open, there fore the appellant had every right to challenge the department's contention that the appellant and CPL are related. The Adjudicating Authority erred in relying on a finding of the Tribunal for a period prior to 28-2-1997 even when the Tribunal has kept that question open for a subsequent period. To put it differently, the Adjudicating Authority should have examined in detail the question of related person and arrived at a proper finding in accordance with law based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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