TMI Blog2007 (5) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... a visit of the Central Excise officers to the premises of the appellants it was noticed that BPL were the owner of the premises where all the 4 appellants were situated and the premises were divided into different parts and given on rent to the appellants. After recording the statements of various persons, the authorities issued show cause notice to all the appellants directing them to show cause as to why BPL should not be considered as related person, and that the price at which final product was sold by BPL should not be considered as the correct assessable value and differential duty be not demanded from all 4 appellants. The appellants resisted the show cause notice on the ground that they are not related to BPL and the price at which they are selling their product to were not depressed due to any relation and also that they sold the same product to independent buyers and price is the same as charged to BPL. The adjudicating authority did not accept the contention of the appellant, and confirmed the differential duty amount on the ground that the 4 appellants were related to BPL, and there was financial accommodation between BPL and the 4 appellants which resulted them being r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest in the business of each other and the appellants had sold almost 95% of their total production to BPL. Hence, they would fall under the category of related persons. 6. It is seen from the record that the appellant had clearly indicated in the replies to the show cause notice and as well as before us that the appellants being private limited companies their shares are not held by BPL and vice versa. We find that the appellants had given satisfactory reply to the authority on financial accommodation. The said reply clearly indicates that the appellants had explained that the amounts paid by M/s. BPL is towards the consideration of sale, was not contradicted by adjudicating authority in Order-in-Original. Be that as it may be, we find that the three Judge Bench of the Hon'ble Supreme Court in the case of Alembic Glass Industries Ltd. (supra) has held as under:- "4.. It was submitted by learned Counsel for the assessee that the assessee was a public limited company as was the chemical co and two public limited companies could not be said to be 'related persons', unless one was the holding or the subsidiary company of the other, which was not the case here. The fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee and the chemical company were related persons. This being so, it is unnecessary to go into the alternate arguments advanced on behalf of the assessee. 8. At this stage of the judgment, learned Counsel for the Revenue draws our attention to the judgment, of a Bench of two learned Judges of this Court, in Calcutta Chromotype Limited v. Collector of Central Excise, Calcutta (99 E.L.T. 202). It does not appear to us that the judgment carries the case of the Revenue any further, nor does learned Counsel so suggest. He says that he has referred to it because of this sentence therein: "The principle that a company under the Companies Act, 1956 is a separate entity and, therefore where the manufacturer and the buyer are two separate companies, they cannot, than (sic) anything more, be 'related persons' within the meaning of clause (c) of sub-section (4) of Section 4 of the Act is not the universal application." We have difficulty, for the reasons already stated, in accepting as correct this sentence. It appears to have been so stated in relation to and in the context of facts of that case. Therefore, the learned Judges, it should be added, remanded the matter for further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or other consideration from KIL either to SASIL or SPPL. Therefore, the case of Department that there is mutuality of interest between respondent nos. 1 and 3 and between respondent no. 2 and respondent no. 3 is without any force in the light of Supreme Court decision in the case of Union of India Others v. Atic Industries Ltd., reported in 1984 (17) E.L.T. 323 (S.C.), wherein it has been held "it is not enough that the assessee has an interest, direct or indirect, in the business of the person alleged to be a related person nor is it enough that the person alleged to be a related person has an interest, direct or indirect, in the business of the assessee. It is essential to attract the applicability of the first part of the definition that the assessee and the person alleged to be the related person must have interest, direct or indirect, in the business of each other. Each of them must have, direct or indirect interest in the business of other." The same view has been reiterated in the decision of the Apex Court in Alembic Glass Industries Ltd. v . Collector of Central Excise and Customs , reported in 2002 (143) E.L.T. 244 (S.C.). The decision of the Tribunal in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court by the following order as reported in 2002 (143) E.L.T. A268 (S.C.): "The question whether CCL and PCPL are related persons need not be gone into in this case because of the finding of the Tribunal on a question of fact that the prices at which the goods are, said to have been sold to the alleged related persons is the same as sold to the other purchasers. Therefore, there being any depressed price in favour of the related buyer will not arise. This being a question of fact we find no reason to interfere with the finding of the Tribunal: The appeal is dismissed." From the above reproduced portion of the judgment of the Hon'ble Supreme Court it is very clear that if the goods are sold to the related person at the same price as sold to other purchasers, it cannot be said that there was depressed price in favour of the related buyers. It is on record that the appellants had sold the finished goods at the same price to BPL as well as to independent buyers, and hence, on this point also, the impugned order is unsustainable. 8. In view of the above findings we are of the view that the impugned order is liable to be set aside, and we do so. Appeals are allowed with consequenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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