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TMI Blog2009 (2) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... ,101/- being differential duty due on the above clearances considering unit price of Rs. 860/- per MT as the applicable assessable value. The demand is on the basis that SVS and MBD are related persons and the sale price adopted by SVS for sale of molasses to MBD was much lower than price of molasses of similar manufacturers at the material time. M/s. Salem Co-operative Sugar Mills (SCS) and M/s. Madhuranthagam Co-operative Sugar Mills Ltd., (MCS) had sold molasses at prices ranging from Rs. 860 to Rs. 1060/- per MT. These were reliable comparable prices for assessment of impugned clearances. The Commissioner adopted the lowest of the sale prices namely, Rs. 860/- for assessment. The instant appeal challenges the demand of Rs. 22,88,101/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertible debentures. These transactions showed that there was mutuality of interest between SVS and MBD. MCS and SCS had sold molasses at prices ranging between Rs. 860/- per MT to Rs. 1060/- per MT during the relevant period. Sale price of Rs. 300/- adopted by SVS for sale of molasses during 4/96 to 2/97 did not represent the real value; nor Rs. 250/- per MT adopted by SIS for similar sales to MBD. During 1/97 & 2/97, SVS had sold molasses to other buyers at Rs. 500/- per MT; this was for stray sales compared to the substantial sales made to MBD during the material period. Lack of storage space could not be accepted as valid reason for SVS selling molasses at a low price. Larger period applied as price declaration in Annexure-IIB had been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no ground for finding existence of mutuality of interest. 1. Plus Cosmetic Pvt. Ltd. v. CCE, Kanpur - 1999 (108) E.L.T. 71 2. CCE, Rajkot v. Amarsinjhi Stationary Industry Ltd. - 2005 (184) E.L.T. 186 SIS had sold molasses at the rate of Rs. 250/- per MT and SVS had sold molasses at the rate of Rs. 500/- during the relevant period to independent buyers. The appellants were not provided with invoices relied on for determination of value and confirmation of demand. It is further submitted that suppression of sales at the price rate of Rs. 300/- per MT to MBD by the appellants could not be alleged as the Commissioner accepted in the impugned order that the price declaration in form Annexure IIB had been filed by the appellants. As per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest between the two entities solely on the ground that SVS issued 0% freely convertible debentures for a value of Rs. 1200 lakhs to MBD. As rightly argued by the appellants, we find that, convertible debentures are normally purchased as an investment, expecting returns on sale of equity shares on their conversion at the market price, after effectively purchasing them at their face value. We find that purchase of 0% fully convertible debentures cannot be held to be interest free loan extended by MBD to SVS. However, in the absence of allegation of mutuality of interest on any other ground, even interest free loan extended by the buyer cannot to be a reason to hold that the sale price to the buyer is not a normal price. This was the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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