TMI Blog2006 (6) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and it was revealed that the appellants sell their entire product to M/s. CPL another company for a price of Rs. 4/- per kg. But M/s. CPL sell the product 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-Origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of related person for the period from 1-3-1997 to 31-3-1998 to which the present appeal relates. The Adjudicating Authority had the corresponding duty 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 ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93-94 and 94-95. Out of this compensation, CPL passed on to the appellant Rs. 31,78,929.37 in 92-93; Rs. 26,29,847.50 in 93-94; and Rs. 4,49,280/- in 94-95. Thus 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that M/s. CPL purchased carbon dioxide even at a lesser price of Rs. 3.50 per kg from M/s. IFFCO, a quasi governmental authority. It appears that the lower authority 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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