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TMI Blog2000 (11) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect from 13-8-1993, revealed that the entire quantity manufactured was sold to the second appellant. It was found that the administrative offices of both the appellants were housed in the same building 6A, Suddar Street, Calcutta; that Shri B.K. Sampat, Managing Director of the first appellant, was also Director of the second appellant; that the second appellant made interest free advances to the first appellant which were utilised for the purchase of raw materials, payment of salaries etc.; and that the goods manufactured were sold at a considerable lower price. 2.1 On conclusion of the investigation, a show cause notice was issued alleging that the first appellant suppressed the material fact that the entire sales were made to the second appellant, who was a related persons , at a considerably lower price than the price at which the said goods were sold by the second appellant to non-related buyers and thus violated the provisions of Rule 173C of the Central Excise Rules, 1944 by not declaring the proper value which resulted in evasion of central excise duty to the tune of Rs. 2,14,506.28 during the period from 1990-1991 to 1993-1994. The aforementioned duty was sought to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department at the time of assessment of the relevant RT-12 returns. The first appellant submitted the relevant gate passes/invoices along with the RT-12 returns to the jurisdictional Superintendent of Central Excise for assessment and all such documents so enclosed indicated the name of the second appellant as consignee/buyer and the RT-12 returns were finally assessed without raising any objection. The learned Consultant, therefore, stoutly denies the allegation of suppression of fact and contends that the extended period of limitation cannot be invoked in this case. In this connection, he relies on the judgment of the Hon ble Supreme Court in Cosmic Dye Chemicals v. C.C.E., Bombay reported in 1995 (75) E.L.T. (S.C.). 3.1 The learned Consultant pleads that the bulk sale to a single company by itself does not constitute a sale to a related persons within the meaning of Section 4(1)(a)(iii) of the Central Excise Act, 1944. He relies on the decision of the Tribunal in the case of Chloride Industries Ltd. v. C.C.E., Pune - 1999 (113) E.L.T. 956 (T) wherein it was held that sale of entire production by itself is not a reason for inter-relationship. He further pleads that such e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Thana Division and Another - 1984 (18) E.L.T. 242 (Bom.). 3.5 The learned Consultant assails the assumption of the Department that interest free advance is a proof of related person . He argues that the second appellant being the sole buyer of the entire production, all the expenses incurred by the first appellant for manufacture of the said goods and supply thereof has to be indirectly to be met from the sale proceeds realised from the second appellant. As such, taking interest free advance from the second appellant is a normal business practice and there is nothing unusual about it. In support, he relies on the decision of the Tribunal in Plus Cosmetics Pvt. Ltd. v. C.C.E., Kanpur - 1999 (108) E.L.T. 71 (T) and International Computer India Manufacturing Company Ltd. v. C.C.E. - 1989 (41) E.L.T. 287. 3.6 The learned Consultant pleads that common office premises, and commonness of Directors and some staff members, do not establish the second appellant is a related person and a favoured person . In support of this contention, he relies upon the decision of the Tribunal in Plus Cosmetics Pvt. Ltd. v. C.C.E., Kanpur - 1999 (108) E.L.T. 71 (T). 4. Shri R.K. Roy, learned J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the goods were sold to be second appellant after packing the same with straw. This shows that the first appellant was transferring the entire stock of production to the second appellant who would complete the process of packing at his premises. The condition in which the porcelain insulators were sold to the second appellant is not the usual condition in which such goods are ordinarily marketed, i.e. the goods are ordinarily sold in cardboard cartons, wooden crates etc. Moreover, this is not a simple case where the first appellant received advances in the normal course of business and in fact, the entire financial dealings between the two establish beyond doubt that there exists a definite financial interest for them in each others business. This has been clearly brought out in the impugned order in the following words : From the statement of Shri B.K. Sampat, Director of both the noticee company in the show cause notice itself, it becomes clear that M/s. SCPL does not charge any interest from M/s. APL and the production of M/s. APL is controlled by M/s. SCPL as per requirement of the market on the basis of orders secured by M/s. SCPL, 100% production of M/s. APL is sold to ..... 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