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CCE, Raipur Versus M/s. Akash Ispat Ltd.

2016 (2) TMI 683 - CESTAT NEW DELHI

Valuation - Short payment of central excise duty on the goods cleared to related buyers - Differential duty with interest - Revenue asserted in the appeal that in terms of MRTP Act, two body corporates will be treated as under the same management if one or more Directors constitute 1/4th of the Directors of the other thus all the buyers are inter-connected with the respondent - Held that:- The provisions of MRTP Act talks about inter-connectivity between two body corporates. Here, it is an admit .....

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ction 2(41) should be in such way as specified in Section 6 of the Companies Act. In terms of Section 6, a person shall be deemed to be a relative of other, if, and only if, they are members of a HUF or husband and wife or one is related to other, in a manner like father, mother, daughter, brother, etc. A corporate entity, the respondent being a Public Limited Company, cannot fit into being called a ‘relative’ in this context. It is apparent that the understanding by Revenue is due to mixing up .....

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he Petitioner : Shri B.B. Sharma, AR For the Respondent : None ORDER PER B. RAVICHANDRAN: The Revenue is in appeal against the order dated 22.3.2007 of the Commissioner (Appeals)-I, Raipur. 2. The brief facts of the case are that the respondent are engaged in the manufacture of M.S. Ingots liable to central excise duty. The proceedings were initiated against them for short payment of central excise duty on the goods cleared to related buyers. After due process, the Original Authority vide order .....

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atives in terms of Schedule-I A of Section 6 of the Companies Act, having relationship and running, controlling and managing the inter-connected undertakings. The profit accruing from the sale through related persons goes to the same family or relative, as deemed in Section 4(3)(b) read with Section 2 (41) of the Companies Act, 1956 and thereby mutuality of interest gets established and Section 4 (1)(b) of Central Excise Act, 1944 is invokable. 4. The respondent vide their letter dated 23.11.201 .....

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sale value is vitiated. The respondent is a Public Limited Company having three Directors viz. S/Shri Krishna Kumar Agarwal, Rajesh Kumar Agarwal and Anand Kumar Agarwal. Out of five buyers, four are proprietary concerns. These are M/s. Kishan Steel Rolling Mills, Proprietor, Shri Rajesh Kumar Agarwal, Shri Kishan Mechanical Works, Proprietor, Shri Anand Kumar Agarwal, Shree Krishan Steel Unit-II, Proprietor, Shri Naval Kishor Agarwal and Shee Ram Steels, Proprietor, Shri Krishna Kumar Agarwal. .....

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ty further held that the respondent and all the buyers are related in terms of sub-clause (ii) of Clause (b) of sub-section (3 ) of Section 4 of the Central Excise Act. He arrived at this conclusion treating the companies also as natural person and being relative of one another. The impugned order rejected the findings of the Original Authority regarding the respondent and the buyers being relative . It was further held that since all goods produced were not sold to these buyers, the scheme a .....

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espondent are not covered and hence not contravened the provisions of Section 4(1)(b) read with the Central Excise Rules and Valuation Rules. He set aside the original order. 6. We find that the appeal against the above detailed findings of the lower authorities is not based on any sound legal principles. We find that the Revenue asserted in the appeal that in terms of MRTP Act, two body corporates will be treated as under the same management if one or more Directors constitute 1/4th of the Dire .....

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