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TMI Blog2002 (3) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... lector of Central Excise, Bangalore. In remaining appeals, orders were adjudicated by the respective Assistant Collectors on which appeals were filed before the Commissioner (Appeals). They have become unsuccessful before the Commissioner (Appeals). Hence, all these appeals. 3. The issues relates to concept of related person. It was alleged in the show cause notice dtd. 30-11-88 in Appeal No. E/5279/94 that Bharat Forge holding 40% shares in the appellant-company, interest free loan of Rs. 50 lakhs had been given and the said fact was not disclosed to the Department while filing the price list; the appellant-company and the said Bharat Forge Ltd. (BFL) have mutual interest in the business of each other. On similar grounds show cause notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the impugned Order-in-Appeal No. E/5279/94 with reference to the charge of reciprocal interest he said that this observation was beyond the scope of the show cause notice since same was never alleged in the show cause notice nor an opportunity was given to counter the same and further same was not substantiated. He submitted that in some of the subsequent show cause notices, though this charge was alleged in vague but same was not substantiated and at any rate that charge cannot be basis in treating BFL as related person of the appellant-company. He contended that the aspect as to how there has been clearance of the said product, crown wheel pinion, at the lower price has not been set out or discussed with factual information and only a g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) E.L.T. 338]. 7. Shri Parameswaran, replied that the case of Pilky Footwear (supra) relied upon by the DR is not applicable to the facts of this case. Not only that case was with reference to old Section 4 of erstwhile Act but prior to the verdict of the Supreme Court in the case of Atic Industries (supra). In that case the agreement provided not merely for giving of advice, assistance and technical know-how and supervision to the buyer's unit, but also for supplying necessary working capital by way of interest free advances for operation of plant procurement and moulds and purchase of equipments. In that case the seller was prohibited from enlarging the capacity or from installing the fresh machinery without the consent of the buyer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business of the person alleged to be a related person nor is it enough that the person alleged to be a related person has an interest, direct or indirect, in the business of the assessee. It is essential to attract the applicability of the first part of the definition that the assessee and the person alleged to be a related person must have interest, direct or indirect in the business of each other......... 10. We find that ratio of the decision in the case of Pilky Footwear relied upon by the DR is not applicable to the facts of this case as it was rightly pointed out by the appellant s Counsel. Much Water has been flown under the bridge since then by developing the Case Law on the point of issue. We are of the view that the ruling gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge that BFL have advanced interest free loan may be a case for additional consideration or adding interest depending upon the nexus between the advances and the determination of price and at any rate that cannot be the basis for treating M/s. BFL as related person. Adding notional interest on advances is not an issue herein nor we are concerned with that. A mere commercial contract between two independent parties for purchase and sale of goods manufactured by one party cannot ipso facto lead to the conclusion that both are so associated as to the interest of the business of each other. In order to be regarded as related person both the ingredients have to be satisfied viz., the two have to be associated with each other. Interest in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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