9911796707
TMI Blog1994 (4) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants entered into an agreement with M/s. Universal Oxygen Company, Kurnool during June, 1971 for the sale of Oxygen Gas which is produced as a bye product in the course of manufacture of Vanaspati. The Oxygen Gas was supplied to M/s. Universal Oxygen Company through pipeline who in turn filled the cylinders and sold to customers. As Oxygen was an excisable commodity attracting T.I. 14H and the duty was assessable on ad valorem basis. Show cause notices were issued to the appellants asking them to show cause as to why the price at which M/s. Universal Oxygen Company sold oxygen to their customers should not be taken as assessable value for the levy of Central Excise Duty. Show cause notices were duly answered by the appellants contending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. The Clauses 3, 5, 7 of the Contract dated 11-6-1971 and Clauses 1, 2 & 3 of contract dated 4-9-1982 are reproduced as under :- "Clause- 3 : - For effecting the supply at the point of drawal by the purchasers, the sellers have to make the necessary provisions of the bell-holder of suitable capacity, measuring meter and covered accommodation of about one thousand square feet, and such open spare as may be deemed essential. The rent for both is payable is Rs. 1,000/-(Rupees : One thousand only) per annum. Clause-5 : The sellers agree to supply to the purchasers upto a limit of two thousand gallons of water daily. This quantity of water can be drawn free of cost from the sources of supply of water of the sellers. Clause-7 : The purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership Act. The dealing between them are at arm's length and in the course of normal business without any extra commercial consideration barring the stipulated price. He said that since Universal Oxygen Company had paid the duty on their sale price and asking the appellants to pay duty on the sale price of the Universal Oxygen Company amounts to double payment. He contended that there is no financial or managerial interest in between two and in the absence of mutuality of business interest they are not related persons and the price at which M/s. Universal Oxygen Company sells the oxygen gas cannot be taken as assessable value. In support of his contention he referred to the decision in the case of Straw Products Ltd., and Another v. Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. We have considered the rival submissions and perused the records. It is an admitted fact that the appellants and M/s. Universal Oxygen Company are separate legal entities. It is not even the case of the Department that M/s. Universal Oxygen Company was a shadow unit of the appellants. In the case of Rasoi Ltd., (supra), we find that goods were first sold to a shadow unit which in turn sold the goods and in the facts and circumstances of that case it was held that Department was justified to lift the corporate veil and unmask the colourful device adopted by the party to supress the real value of their compressed gas. In view of the admitted position that both the units are independent entities, the ratio of that decision is not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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