TMI Blog2019 (7) TMI 1794X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Central Excise Act, 1944. The appellants in the course of argument have fairly submitted that all these three Units could be termed as interconnected undertakings. However, there is no mutuality of interest and hence the definition of related person as prescribed under Section 4(3)(b)(iv) of Central Excise Act, 1944 is not satisfied. Related persons or not - HELD THAT:- It is difficult to appreciate the arguments of the appellant in as much as the Profit Loss Accounts maintained by all the three Units are not separate but common and also the Balance Sheets prepared is common for all these Units. Besides, all these three Units are particularly functioning as single Unit and hence cannot be called as independent to each other and the transactions between them are on principal to principal basis. Therefore, the findings of the learned Commissioner that three Units are related persons within the Section 4 (3) (b) of Central Excise Act, 1944 is correct and sustainable. Extended period of limitation - HELD THAT:- The department was fully aware of the fact that M/s Mandhana Dyeing, the Appellant is a Division of MIPL who undertake processing of goods for MIPL on job work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant during the relevant period availed deemed credit in terms of Notification No. 6/2000 CE dated 01.03.2002 on the inputs and utilized the same for payment of duty on the processed fabrics. Alleging that the method of valuation arrived at by the appellants relating to their fabrics processed on job work basis for MIPL MIP is incorrect as the clearances of job-worked goods to MIPL and MIP, their own divisions, are clearance to related person on not to independent buyers, Show cause notice was issued to the Appellant demanding differential duty for the period from May 2001 to May 2003 amounting to ₹ 4,15,25,760/- with interest and penalty; also personal penalty under Rule 26 of Central Excise Rules, 2002, proposed on other notices. On adjudication, the demand was confirmed with interest and penalty against the appellant and personal penalty was imposed on other noticees. Hence, the present appeals. 3. Learned Advocate Shri Gajendra Jain has submitted that though the department has alleged that the appellant and MIPL are related persons, however, failed to prove as to how exactly the definition of related persons is satisfied. He has submitted that the Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtended period of limitation and confirmation of the demand is unsustainable. They have placed relevant correspondences with the department dated 25.06.1988, Nov 1999, 10.10.2000, price declarations filed from time to time, letter dated 09.04.2003 written by the Deputy Commissioner and Registration Certificate dated 17.08.1994 in support of their submission no facts was suppressed from the department. Further they have submitted that during the period under dispute various judgments have been delivered supporting the stand taken by the appellants that even though the goods are processed on job work basis, the value of job worked goods are to be determined following the principle of law laid down in the M/s Ujagar Prints s case. 6. Learned Advocate has further submitted that denial of deemed credit availed and utilized by them is bad in law. He has submitted that the deemed credit of ₹ 1,94,83,918/- availed by them is not hit by para 6 of the said notification. The deemed credit was allowed on the value of the finished goods, whereas demand of differential duty is raised by enhancing the assessable value; Para 6 of the notification would hit only that portion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rices of comparable goods at which they received goods from the appellants and thereafter sold to MIPL, the average value was adopted by the department. He has further submitted that the clearances made by the appellants, M/s MFP (Export Division), was assessed by adopting the Rule 8 of Central Excise (Valuation) Rule, 2000, by the department since these goods were consumed in the premises for manufacturing of other finished goods. 8. Rebutting the argument that on facts and circumstance of the case extended period of limitation cannot be invoked, Learned AR for the Revenue submitted that from the Registration Certificate dated 17.08.1994 it is noticed that the same was issued in the name of M/s Mandhara Textiles Ltd. and the endorsement was made indicating change in the name of the company as M/s Mandhana Industries Ltd with effect from 02.05.1996. It is evident from these documents that Mandhara Dyeing is a division of Mandhana Industries Ltd. Similarly, all other correspondences with the department do not clearly reveal the fact that the appellants are undertaking job work for their other two divisions. The appellants and two other Units are related each other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis. Therefore, the findings of the learned Commissioner that three Units are related persons within the Section 4 (3) (b) of Central Excise Act, 1944 is correct and sustainable. 13. The Learned Advocate has vehemently argued that the demand is barred by limitation in as much as in their communications/ correspondences with the department they have informed the department that the appellants are undertaking job work for MIPL and MFP (Export Division) which are Divisions of Mandhana Industries Pvt Ltd (MIPL). In the declarations filed with the department as required under notification No. 27/92-CE it is clearly indicated thereunder that M/s Mandhana Dyeing is a Division of MIL. Therefore, the department was fully aware of the fact that M/s Mandhana Dyeing, the Appellant is a Division of MIPL who undertake processing of goods for MIPL on job work basis and supplied the same to the said after completion of the processing of fabrics supplied to them. The communications between the Appellant and the department commencing from 04.06.1998 clearly indicate that while responding to the objections on valuation of job work of fabrics for their other units, the appellant had cle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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