TMI Blog2003 (5) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Hydraulics Ltd., the latter are the holding company and the appellants are the subsidiary company. Therefore, he has held that they are to be treated as related persons. As a consequence, he has upheld the AC's ruling that the price at which M/s. Hydraulics Ltd. sells the goods should be taken into consideration for Central Excise purposes and since M/s. Hydraulics Ltd., have two-tier price structure i.e. one for inter state sales and the other for intra state sales respective prices should be taken into consideration and he has directed the range Superintendent to verify the statistical figures, break-up given by the appellants for inter state and intra state clearances and to calculate the duty liability accordingly. 2. Appellant contends in this appeal that merely because the appellant is a subsidiary unit and M/s. Hydraulics Ltd. is a holding company by that fact itself, the selling price of M/s. Hydraulics Ltd. cannot be adopted. It is submitted that there is no mutuality of interest directly or indirectly in the business of each other. It is, further, submitted that the appellant is having "independent sales" and the price is lower than the sale price of Hydraulics Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Asiatic Thermics Ltd. for bulk supply of moulds @ Rs. 24.60 p in July, 1997. Accordingly, we do not find any under valuation in the present matter. Coming to the question of invokability of extended period of limitation for demanding duty we observe that the classification lists were filed by M/s. ITCL giving full description and these were approved from time to time. Under their letter dated 27-3-79 they had submitted details of the raw materials used and the manufacturing process to the Department. The finding of the Commissioner that, in case any product is likely to attract another Heading of the Tariff, it is imperative on the part of the assessee to make a clear mention of the substance of raw material, applies in our view, more to the Departmental officers who are required to approve the classification lists after examining and verifying the same, it is imperative on their part, in such a situation, to enquire about substance/material out of which the product is made and other further details. 12. The last issue to be decided is whether M/s. ITCL and ATL are related persons. The various reasons advanced by the Adjudicating Authority in the impugned Order to hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion of India, 1989 (43) E.L.T. 401 and in the case of Ralliwolf Ltd. v. Union of India, 1992 (59) E.L.T. 220. In the first case, learned single Judge of the Bombay High Court took the view that the mere fact that assessee happened to be the subsidiary of another company will not in any way go without establishing that the transaction between the subsidiary company and the other company was not at arms length. For a proper understanding of the law stated by the Bombay High Court, we read paragraph 11 of that judgment : "11. In the present case also, each of the authorities below has proceeded only upon the basis that there was a special relationship between the petitioners and Dawn Mills, in that the petitioner, were a subsidiary of Dawn Mills. No attempt has been made to establish that, in fact, a low price has been charged and/or that Dawn Mills have been accorded any favourable treatment. In the absence of such evidence and merely upon the basis that there is a special relationship such as that of subsidiary and principal it cannot be held that the price at which the subsidiary sells to the principal is not the correct price for the purposes of assessment of excise duty." Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bottles were durable and returnable containers. Appellants sold their goods on condition that buyers supply the containers for filling and same would be returned to them. (e) Since appellants did not provide the transport facilities to the buyers, the goods were sold on FOB ex-factory gate basis. Therefore, the question of transport charges being included does not arise in the normal price at the factory gate." 5. The ld. Consultant drew reference to similar findings recorded in the case of CCE CC Mumbai-III v. Ralliwolf Ltd., 1998 (100) E.L.T. 528 (T) and also on the judgment rendered by the High Court of Bombay in the case of Ralliwolf Ltd. v. UOI, 1992 (59) E.L.T. 220 (Bom.) wherein also a similar proposition has been held and in para 31, it has been clearly recorded that mere fact of a unit being a subsidiary of holding company by itself is no cause to adopt higher value unless there is flow back and mutuality of interest in each other. Further reference was drawn to the judgment of Bombay High Court rendered in Dawn Apparels Ltd. v. U.O.I., 1989 (43) E.L.T. 401 (Bom.). Reference was also drawn to the judgment of Apex Court rendered in U.O.I. Others v. Atic Indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany is justified. 7. Ld. Consultant distinguished the Apex Court's judgment and noted that the Apex Court has not differed from its earlier judgment and the Apex Court's found the facts of mutuality of interest between the units and in that light upheld the proceedings in the cited cases relied upon by ld. DR. 8. On a careful consideration of the submissions, and on perusal of the entire judgments cited, we find that in the present case, there is no mutuality of interest between the holding company and subsidiary unit. M/s. Hydraulics Ltd. merely purchased the shares of appellant's unit. Appellant has been doing business independently by selling to OE manufacturers and in the market and the price is different and lower as contended by them. The appellant is not having any interest in the affairs of M/s. Hydraulics Ltd. There is no mutuality of interest between them and, therefore, the citations referred to by the ld. Consultant directly apply to the facts of this case. The Apex Court's judgment cited by learned DR has found the facts of mutuality of interest and on that count held that higher price of the holding company can be adopted. There has to be mutuality of interest as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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