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2005 (3) TMI 130 - SC - Central ExciseValuation (Central Excise) - Related person - Held that - The fact that two public limited companies have common Directors does not mean that the one company has an interest in the business of the other - both the assessee and BHPL are public limited companies - Therefore, ratio of Alembic Glass Industries Ltd. 2002 (4) TMI 75 - SUPREME COURT OF INDIA , would be fully applicable - a ground was sought to be raised that BHPL bears the entire advertisement cost of the product of the assessee. This was not a ground which was urged on behalf of the Revenue at any stage of the proceedings and we do not permit them to raise it now - Decided against Revenue.
Issues:
1. Valuation of products under Section 4 of the Central Excise Act concerning the relationship between the appellant and Bulsara Hygiene Products Ltd. (BHPL). 2. Questioning the finding based on factual basis regarding the partnership concern and common directorship between the appellant and BHPL. 3. Interpretation of the term "related person" as per Section 4 of the Act. 4. Application of the judgment in Union of India v. Atic Industries Ltd. and Alembic Glass Industries Ltd. regarding the concept of related persons and common directorship. 5. Dispute over the advertisement cost borne by BHPL for the appellant's product. Analysis: 1. The appeal in question arose from the Tribunal's decision rejecting the appellant's appeal against the order of the Collector (Appeals), Central Excise Ahmedabad. Both forums concurred that BHPL, the company marketing the appellant's goods, was not a related person for the purpose of product valuation under Section 4 of the Central Excise Act. 2. The appellant contested the finding on the basis that both parties had an equal interest in a partnership concern, Bulsara extrusions, and shared a common directorship. However, the court emphasized that the interest in a third concern, not directly related to the appellant or BHPL, was not relevant for Section 4 of the Act. 3. Referring to the precedent set in Union of India v. Atic Industries Ltd., the court clarified that a concern would be considered a related person only if there was a reciprocity of interest, defined as shareholding, between the parties. The interest claimed by the appellant did not meet this criterion. 4. The court further cited the judgment in Alembic Glass Industries Ltd., stating that common directorship between public limited companies did not imply an interest in each other's business. As both the appellant and BHPL were public limited companies, the ruling in Alembic Glass Industries Ltd. was deemed applicable. 5. An additional ground raised regarding BHPL bearing the entire advertisement cost for the appellant's product was dismissed since it was not raised by the Revenue during the proceedings. Consequently, the appeal was dismissed without costs. Subsequent appeals were disposed of in line with the decision in the initial appeal (C.A. No. 7609/1999).
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