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TMI Blog1987 (6) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... ive partners are the same as those of M/s. Rakesh Bulb Industries. The fifth partner in this firm, i.e. M/s. United Commercial Corporation, is none other than the mother of these four brothers, namely, Mrs. Manibai Anantram Patodia. M/s. Rakesh Bulb Industries however filed price lists claiming approval of the prices charged by them to M/s. United Commercial Corporation. Since it appeared that both the firms were a related person within the meaning of Section 4(4)(c) of the Central Excises and Salt Act, 1944, the authorities concerned issued a Show Cause Notice to the said M/s. Rakesh Bulb Industries calling upon them to show cause as to why the normal price of the electric bulbs manufactured by them should not be determined on the basis of prices charged by M/s. United Commercial Corporation. It appears that no reply was filed to the Show Cause Notice and during the personal hearing it was submitted by M/s. Rakesh Bulb Industries that M/s. United Commercial Corporation was not a related person . Since, according to them, (i) Both were independent entities for all purpose like Income Tax, Sales Tax, Registration of Firms etc., and (ii) M/s. Rakesh Bulb industries was not selling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arged by them to M/s. United Commercial Corporation. The Assistant Collector of Pune, vide his Order dated 30-9-981 held that M/s. Rakesh Bulb Industries and M/s. United Commercial Corporation were a related person , and hence duty shall be paid on the value determined with reference to the price charged by the related person , viz., M/s. United Commercial Corporation and the respondents claim for deduction of the selling expenses incurred by M/s. United Commercial Corporation was not accepted by the Assistant Collector on the ground that the respondents did not furnish any break-up of these expenses backed by Chartered or Cost Accountant certificate. Against this order, the respondent filed their appeal before the Collector (Appeals), Bombay, who vide his Oder-in-Apeal dated 16-4-1982 confirmed the findings of the Assistant Collector that Rakesh Bulb Industries and United Commercial Corporation are a related person , but also held that respondents Rakesh Bulb Industries are entitled for deduction on account of actual transport expenses from the factory to the premises of the related person , amount of excise duty, sales tax, and octroi duty and also cost of secondary or tertia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and that .the Supreme Court s decision on the issue of related person clearly supersedes the said order dated 16-4-1982 passed by the Appellate Collector in their case. However, the Assistant Collector held that the respondents and the said M/s. United Commercial Corporation are a related person and informed the respondents that prices declared in Col. 6 will be taken as the normal price of the goods in the course of wholesale trade and discount of 20% as declared in Col. No. 12 of the price declaration shall be allowed for deduction where it is actually passed on by the United Commercial Corporation to their customers and the price lists will be accordingly approved and forwarded in due course. Against this order, the respondents filed an appeal before the Collector (Appeals) of Central Excise, Bombay, who vide his impugned Order dated 19-11-1984 allowed the appeal holding that the respondents and the said M/s. United Commercial Corporation are not a related person . Hence the present appeal. 2. Since in all the aforesaid appeals common question of law was involved between the same parties, they requested that all the appeals be heard together. Consequently, all the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership firm consisting of four partners who are real brothers and United Commercial Corporation is also a partnership firm consisting of five partners, four out of these five partners are the same as those of M/s. Rakesh Bulb Industries and the fifth partner is none other than the mother of the four brothers. In the presence of these facts it was not contested by the appellants M/s. Rakesh Bulb Industries either before the authorities below or before us that all the partners of M/s. Rakesh Bulb Industries, Pune, were relatives of the partner of M/s. United Commercial Corporation within the meaning of the term as in the Companies Act. Thus, the contention of the learned consultant for the appellants, M/s. Rakesh Bulb Industries that both the firms are independent for income tax, sales tax or registration purpose and therefore should not be treated as a related person within the meaning of Section 4(4)(c) of the Central Excises Salt Act cannot be accepted. For, when one talks of father, mother, son etc. with reference to human affairs, the reference is to relationship between human beings. A firm cannot be a father or mother of another firm. To insist that two firms should be so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... themselves. In this view of the matter we are fortified by the recent judgment of the Hon ble Supreme Court rendered in the case of Mohan Lal Maganlal Bhavsar v. Union of India, 1986 (23) E.L.T. 3 (S.C.). In that case there were two separate partnership firms - the manufacturing firm and the chief distributor firm. The three partners of the manufacturing firm along with the son of each of them were also partners of the chief distributor firm. From this fact the Hon ble Supreme Court observed that there was identity of interest between the two firms. The Supreme Court on these facts, inter alia, concluded that the to firms could not be said to be an independent party and the prices at which the goods were sold by the manufacturing firm to the distributor firm could not be taken to be the real value of the goods. 8. As regards the contention of the learned SDR for the appellants in Appeal No. 1449 of 82-A that the order of the Appellate Collector dated 16.4.1982 insofar as it relates to the deduction on account of cost of secondary packing, if any, is not correct because Section 4(4)(d) (i) does not make any distinction between the primary and secondary packing, it would suffic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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