9911796707
TMI Blog1996 (11) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Ltd. (RI for short). 2. The Assistant Collector had held in his order of August, 1993, that the assessable value of the tools sold by the assessee should be the price at which RI sold the goods to its dealers, because RW RI were related persons. The grounds on which he based this conclusion were that RI held 60% of RW s share capital; RI was the sole distributor in India and Nepal for RW s products, the sale agreement between the two provided that RW would sell the goods to RI at mutually agreed prices and RI would sell then to dealers at any price; it also provided that advertising and publicity expenses would be borne by RI and that the profit of RI of the abnormally high being 32 to 35%. The Assistant Collector also disallowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative that RW was a subsidiary of RI, 60% of its share capital is held by RI. Therefore, these two are related person. If RI holds 60% of the share capital of RW, the fact of its being interested in the affairs of RW is established. As a majority stockholder it would naturally benefit or suffer, as the business of the RW progresses or diminishes. However, the Departmental Representative is not able to show that RW is interested in the business of RI. The stock holding pattern could not result in RW being interested in the business of RI. It is a separate entity and the management of the two firms are separate. The Supreme Court judgment s in Union of India v. Atic Industries - 1984 (17) E.L.T. 323 (S.C.) makes it clear that custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground in the department s appeal, only one of the three would be satisfied. We do not, therefore, see any reason to accept the Commissioner s appeal in this regard. It would follow there from that the assessable value is the value at which RW sells the goods to RI. The question of any discount given by RI to its dealers would hence not come into the picture. 8. The issue of packing charges will now be considered. The Assistant Collector had found that the goods were to be supplied to outstation customers and, in the absence of a market at the factory gate, this was the normal packing. The Collector (Appeals) found that the goods sold to the Government bodies were not packed in wooden crates and therefore similar packing was not neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s specified in Section 4. However, the Collector (Appeals) has considered the sales to Government bodies not to determine the value of the goods but to see what is the nature of packing that is required. In other words, whatever may be the class of buyers for the same goods, the nature of packing required in order to `render them marketable would be the same. It would not vary from buyer to buyer or class to class; the only exception being a particular packing required by a particular customer. There is nothing in the appeal to question the Collector (Appeals ) finding that the goods are sold to Government bodies without packing in wooden crate and that such Government bodies are locally located. The decisions relied upon by the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value at which the goods were sold by RW to RI and not at the value at which the goods were sold by RI to its dealers. While the Commissioner recorded this plea, she has not considered it and confirmed the demand for differential duty. Once it is held that the assessable value is the price at which RW sells to RI the demand for differential duty must be worked out on that basis and not on the basis of the sales by RI to its dealers. The assessee s appeal therefore would succeed on this point. 10. Appeal E/125/94-Bom dismissed. Appeal E/114/R/96-Bom dismissed with regard to classification and allowed to the extent that the assessable value for calculating its differential duty must be the value at which RW sold the goods to RI. - - Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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