2004 (8) TMI 483 - AT - Central Excise

Summary

Issues:
1. Determination of assessable value for Ayurvedic Medicines sold by a super stockist.
2. Interpretation of the term "related person" under Section 4(4)(c) of the Central Excise Act, 1944.
3. Application of the principle of mutuality of interest in business transactions.
4. Consideration of precedent in Avon Scales Co. v. CCE, Delhi regarding related persons in family-owned businesses.

Analysis:
The appeal in question pertains to the assessable value of Ayurvedic Medicines sold by a super stockist, M/s. K.K. Enterprises, which is a proprietary concern of the son of the proprietor of M/s. Santhosh Pharmacy, the appellants. The Commissioner of Central Excise (Appeals) upheld the duty demand, determining that the value at which the super stockist sold the medicines should be adopted as the assessable value. The Tribunal noted that the super stockist falls under the definition of "related person" as per Section 4(4)(c) of the Central Excise Act, 1944, due to the familial relationship. The Tribunal also considered the principle of mutuality of interest in business, emphasizing that the profit accrued from the business goes to the same family, establishing a close connection between the two entities. Citing the precedent in Avon Scales Co. v. CCE, Delhi, where family-owned concerns were deemed related persons, the Tribunal applied the same reasoning to the present case. Consequently, the Tribunal upheld the impugned order, affirming the duty demand and rejecting the appeal.