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TMI Blog2004 (4) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Marico Industries Limited and Godrej Hi-Care Limited. The order passed by the Respondent in the case of Marico Industries Limited was set aside by this Tribunal. (b) The present appeal relates to the goods sold to Godrej Hi-Care Limited. The assessment of the Appellants from the period 1976 are provisional to the knowledge of the department. As seen from the copy of RT 12 return for the months of January - March, 1998 enclosed. (c) Prior to July, 1997, the said Godrej Hi-Care Limited, who is, inter alia, engaged in the manufacture of Mosquito repellant mats under the brand name of "GoodKnight", was a subsidiary of the Appellants. The said Godrej Hi-Care Limited ceased to be a subsidiary of the Appellants with effect from July 7, 1997. They were desirous of giving the said 'Cinthol Ultimate' of 50 grams as complimentary along with their product "GoodKnight". They accordingly placed orders for supply of 'Cinthol Ultimate' with a declaration on the wrapper "Cinthol Ultimate Free with GoodKnight 30 Mats". (d) The Appellants filed a Price Declarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an intention to evade payment of duty. It was further alleged that the Appellants have failed to submit C.A. Certificate so as to factually explain the reduction in the price at which the goods are sold to Godrej Hi-Care Ltd. It was further alleged that the Appellants have failed to prove that the sale value of the said goods to Godrej Hi-Care Limited has all attributes of transaction value as required by Section 4(1)(a) of the Act and such price is "normal price" in the course of wholesale trade. It was further alleged that since the normal price for sale of identical goods to other buyers is available, the Department is bound to accept such price as normal price in the course of wholesale trade in terms of Section 4(1)(a) of the Act. It was further alleged that the purchase order for sale of the products at a reduced assessable value is only for Godrej Hi-Care Limited which establishes the nexus between the seller and the buyers, which is the subsidiary company of the Appellants and that the Appellants and the Godrej Hi-care Limited have mutuality of interest in each others business and they have some advantage, commitment, influence, investment, portion, right, share or stake w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t directly or indirectly in the business of each other. Thus, it is not enough that the assessee has an interest directly or indirectly 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 any interest directly or indirectly 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 a related person must have interest directly or indirectly in the business of each other. The equality and degree of interest which each has in the business of the other may be different; the interest of one in the business of the other may be direct while the interest of the latter in the former may be indirect, but that would not make any difference so long as each has got some interest direct or indirect in the business of the other ... In the absence of mutuality of interest in the business of each other, the customer company holding shares in the manufacturing company cannot be treated to be a related person." (b) However, recently the two member Bench of the Supreme Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be determined on the basis of such prices. The Court in para 4 while abstracting and affirming the decision of the Tribunal that one sided interest was not enough (relying on Atic Indus. supra) dismissed the departmental appeals. Another case in the context of the Customs Act, 1962, was decided by the Supreme Court in Fisher Rosemount (I) Ltd. - 2001 (134) E.L.T. 321 (S.C.) wherein the Supreme Court has held that mere holding of forty per cent of the shares by a collaborator in the Respondent company and supply of technical database for manufacture of goods in India by them, from whom the Respondent had imported the goods, was insufficient to establish mutuality of interest or that they were related persons. The Apex Court referred to the decisions in Atic Industries supra, as also that in Maruti Udyog, and dismissed the appeal of the department. In the case of UOI v. Kaira District Co-op. Milk Producers Union Ltd., 2002 (146) E.L.T. 502 (S.C.), the Supreme Court dismissed the appeal and saw no reason to interfere with the High Court's view held that the buyer and the respondent in that case were not related persons relying upon the judgment in Atic Industries supra. The Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an unindented buyer cannot be rejected, especially when the purchase is not for resale but captive use of complementary gift. The buyers of the two categories i.e. one purchasing for resale and the other to grant complimentary gift cannot be in the same class of buyers. The sales are to be held of being at arms length. (d) The Supreme Court in the case of C.C.E. v. Guru Nanak Refrigeration Corpn., 2003 (153) E.L.T. 249 and Union of India v. Hindalco Industries, 2003 (153) E.L.T. 481 upheld the rulings when no related person concepts or sales not being in normal course being found. Therefore once the sales are to another company at arms length, the insistence on manufacturing cost certification is not called for. (e) No decision contrary to the Tribunal's decision in Godrej Soaps Ltd., 1999 (111) E.L.T. 374 for sales effected to M/s. Merico Industries on same basis decided in favour of the very said appellants in same facts has been shown, following the same, the demands, confiscation and penalties cannot be upheld and the order is required to be set aside. 3.Appeal allowed after setting aside th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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