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TMI Blog1992 (2) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... clusive marketers/distributors of the said products of the appellants. The brand name Volfarm is owned by the distributors, the said M/s. VOLTAS LTD. The appellants were asked to produced the entire invoices of M/s. VOLTAS LTD. to finalise the assessments after approval of prices declared in the price lists submitted by the appellants. The appellants, however, did not produce all the invoices but produce only limited invoices relating to sale of Volfarm Tomato Ketchup/Sauce. The prices have been revised several times during the relevant periods. Since, as aforesaid, the appellants failed to produce all the invoices of the said M/s. VOLTAS, the Central Excise authorities marked up the prices declared in the price lists by an estimated amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able and fixed costs of the assessee. Direct sales by the assessee are subject to 10% compensation to be paid by the assessee to the VOLTAS LTD. Para 16 of the agreement says that neither of the parties shall be responsible for any breach or non-performance or delay in performance. I find that normally if the sales are on principal to principal basis, the responsibility is there for both the parties in the event of breach etc. but in this case, no responsibility has been fixed and hence I conclude that the agreement is merely a formality. Keeping in view the above facts and findings, I hold that the assessee (appellant) is dictated by M/s. VOLTAS LTD. in terms of quality, specifications, brand name, valuation and the complete marketing. Mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. reported in 1984 (17) E.L.T. 323 (SC) was not found to be covering the facts and circumstances of these cases. The said authority has confirmed the finding of the original authority that the appellant company and M/s. VOLTAS LTD. have mutuality of interest in the business of each other and therefore two are related persons in terms of Section 4 of the said Act. Thus the orders-in-original were confirmed. 3. Learned Advocate, Smt. Archana Wadhwa, arguing for the appellants has urged that the orders of the two lower authorities are untenable in law in view of the direct judgment of Supreme Court in the case of Atic Industries, mentioned supra, facts and circumstances of which are on all fours with the facts and circumstances of these c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has any interest in the business of Atul Products Ltd. There are two point of views from which the relationship between the assessee and Atul Products Ltd. may be considered. First, it may be noted that Atul Products Ltd. is a shareholder of the assessee to the extent of 50 per cent of the share capital. But we fail to see how it can be said that the limited company has any interest, direct or indirect, in the business carried on by one of its shareholders, even though the shareholding of such shareholder may be 50 per cent. Secondly, Atul Products Ltd. is a wholesale buyer of the dyes manufactured by the assessee but even then, since the transactions between them are as principal to principal, it is difficult to appreciate how the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in Cibatul s case, mentioned supra. 4. Opposing the said contentions of the learned advocate, Shri Satish Kumar, learned JDR points out that there is a mutual agreement of sale and purchase of the goods manufactured by the appellants with the said M/s. VOLTAS LTD. The mutual agreement by itself creates mutuality of interest between the appellants and the said M/s. VOLTAS LTD. who are also to bear the cost of advertisement of the product VOLFARM Tomato Ketchup/Sauce. Advertisement of the product is normally the liability of the manufacturer of the product. This clause, therefore, relating to advertisement in the agreement indicates that the appellants have interest in the business of M/s. VOLTAS and thus there is a mutuality of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TD. as being on dictation of the customer. By virtue of the said agreement the transaction between the two parties does not cease to be one as on arm s length. Paras 6 and 7 relied upon by the learned advocate in Cibatul s case, mentioned supra, are quite apt in the facts and circumstances of this case. 5.1 Similarly, on the question whether the said M/s. VOLTAS LTD. are related persons of the appellants reliance placed by the learned advocate on the Supreme Court s judgment in the case of Atic Industries is correct in the facts and circumstances of this case. Relevant extracts have already been reproduced from the said judgment and we respectfully follow the ruling of the Apex Court and hold that the appellants and the M/s. VOLTAS are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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