Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2015 (10) TMI 1840

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t during the impugned period ranges from 16% to 19% whereas the total gross profit of M/s. SIPL during the impugned period is around 18%. If at all, we presume that there is a mutuality of interest in that case also when the goods are sold by M/s. SIPL to M/s. CF on the price at which the goods have been sold to independent buyers, in that case the sale price by M/s. CF cannot be held as assessable value for M/s. SIPL. Therefore, we hold that demand of ₹ 4,84,076/- is not sustainable. Accordingly, same is set aside. M/s. K S Enterprises is a sub contractor and who has got manufactured this aluminum windows in question by purchasing their own raw material and at site. M/s. K S Enterprises has issued invoices to M/s. SIPL to that ext .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ctures etc. They are availing Cenvat Credit on inputs and also availed necessary exemption vide notification No. 09/2001 upto 31.03.2002. An investigation was conducted in the factory premises of the appellant M/s. SIPL and it was revealed that there was another unit in the name of M/s. Continental Furnishers (CF) at Panchkuian Road, New Delhi, engaged in the business of construction, purchase, trading, manufacture of handmade carved artistic goods and decorative furniture termed as Handicraft who claim the exemption under notification no. 76/86-CE. On the basis of the documents it was found that both M/s. SIPL and M/s. CF belongs to Continental Group. It was also observed that M/s. SIPL were selling wooden furniture and other articles to .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ies confirmed the demand as proposed in the show cause notice along with interest and penalties were also imposed. Aggrieved from the said orders appellants are before us. 4. The Ld. Counsel for the appellants submits that the allegation in the show cause notice is that as both M/s. SIPL and M/s. CF are related persons, therefore, the price at which the clearance took place from M/s. SIPL to M/s. CF is not correct transaction value and profit of 18% is to be added thereon. That allegation is on the basis of that both are related person. He submits that both are independent and separate legal entity having their own plant and machinery independently and are assessed to income tax and sales tax and other allied laws independently. He furth .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the said rules could only be made applicable where all the sales in general are routed through the related persons. Therefore, loading of 18% to the transaction value is not justifiable. He further submits that the goods sold by M/s. SIPL to M/s. CF, M/s. SIPL earned gross profit of 18.70%, 16%, 15.79% and 19.60% respectively. He further submits that the goods sold by M/s. SIPL to other independent buyers also on the same gross profit. Therefore, the addition in transaction value is not sustainable. It is also submitted that the panels were purchases by M/s. CF from M/s. SIPL were not sold but utilized for execution of their projects. He further submits that Shri Kailash Lamba provided unsecured loan to M/s. SIPL which was duly entered in .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... mand of duty is not sustainable, therefore, penalties on all the appellants are not imposable. 6. On the other hand, Ld. AR reiterated the findings of the impugned order. 7. Heard the parties. Considered the submission. 8. In this case, there are two issues: a) Whether M/s. CF is related to M/s. SIPL or not, if so whether there is any mutuality of interest in the business of each other. b) Whether the demand of duty can be confirmed on fabrication of aluminum windows by M/s. K S Enterprises in the hands of M/s. SIPL or not. 9. In the first issue, the case of the Revenue is that as Shri Kailash Lamba (HUF) is having its shareholding in both the firms and have advanced certain interest free loans to M/s. SIPL, therefore, bot .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... rofit of M/s. SIPL during the impugned period is around 18%. If at all, we presume that there is a mutuality of interest in that case also when the goods are sold by M/s. SIPL to M/s. CF on the price at which the goods have been sold to independent buyers, in that case the sale price by M/s. CF cannot be held as assessable value for M/s. SIPL. Therefore, we hold that demand of ₹ 4,84,076/- is not sustainable. Accordingly, same is set aside. The second issue is that whether the aluminum windows fabricated by M/s. K S Enterprises are liable to duty in the hands of M/s. SIPL. In this case M/s. K S Enterprises is a sub contractor and who has got manufactured this aluminum windows in question by purchasing their own raw material and at .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates