9911796707
TMI Blog2002 (3) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... cturer, is liable to pay duty of Rs. 31,82,60/- being the amount of duty of Central Excise, evaded due to incorrect valuation of the Iron and alloy steel products the excisable goods cleared by them during the period to the three buyers viz. appellants M/s. Southern Steels Forgings (hereinafter referred to as A4), M/s. India Industrial Enterprises (hereinafter referred to as A5), M/s. Southern Steels Ferro Alloys Corporation (hereinafter referred to as A6) all partnership firms consisting of relatives of one Shri S.K. Gandhi (hereinafter referred to as A-3) and controlled by him. Appellant Shri M.R. Jayaram (hereinafter referred to as A-2) is the Managing Director of A-1). 2. A notice was issued pursuant to the enquiries made by the O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which goods were sold by A1 to A4, A5, A6, could not be considered as the normal price. The same could not be accepted and resort to proviso (iii) to Section 4(1)(a) of Central Excise Act, 1944 for the purpose of determining the value for levy of duty was called for as that would represent the normal wholesale price and on which value for the determination of Central Excise Duty should be made. (b) The Commissioner after hearing the parties ordered - (i) Confirmation of the differential duty Rs. 31,82,601/- under Section 11A of Central Excise Duty on A1. (ii) Penalty of Rs. 31,82,601/- under Section 11AC on A1. (iii) Penalty of Rs. 5,00,000/- under Rule 173Q on A1. (iv) Penalty under Rule 209A of the Rules on A4, A5, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ART will start supply of the melting scrap, HP Sponge Iron Billets and other inputs to the party of the SECOND PART as per the requirements depending upon the production planning and schedule of the party of the SECOND PART. 2. The Party of the SECOND PART in turn will convert the steel scrap into steel billets and rounds as per specification strictly and deliver such converted material to the party of the FIRST PART or their order as per schedule of quantities indicated by the party of the FIRST PART. 3. The specification of the finished product should be strictly in adherence to the standards as specified and all the sizes and length as may be required by the party of the FIRST PART. 4. The rate agreed for carbo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he SECOND PART and no lien over such commodities/stocks of the party of the FIRST PART can be excessive by the banks and/or any financial institution of the party of the SECOND PART. The party of the SECOND PART should exercise adequate caution and care of the safe custody of the aforesaid commodity and they should not mix up the same in their own stock of similar nature. Further the party of the SECOND PART shall be responsible of all the losses, damages etc., caused to the said commodities during the possession. 9. The party of the FIRST PART shall arrange to take the delivery of the finished stock on day to day basis and or as early as possible. 10. The party of the FIRST PART shall settle the payment on mutually acceptab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of this case before us, the same cannot be accepted. The sale price and removal are not at arms length. (b) We have anxiously considered the plea made by A1 before us that to prove Related Person concept and apply the deemed price as per proviso 4(1)(a)(iii), the fact of sale merely not at arms length will not call for nor be sufficient. Mutuality of interest on each other and related person definition in Section 4 as applicable in the case of Companies and Firms will rule the day. No evidence of such mutually of interest exist between A1 A4/A5/A6, Merely because A4, A5 A6 may be Related Persons will not cause the same to shift the burden between A1 and the buyers is pleaded before us. The learned Adjudicator for A1 drew o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the only permissible method under the law was the one adopted by the authorities below which is covered by proviso (iii) of Section 4(1)(a) of the Act, but in doing so the deductions on account of freight for transportation of the goods from the factory gate of M/s. Nutri Foods will have to be excluded. . In the case before us, we would, following these observations, which are found to be squarely applicable in the facts of this case, to order the re-determination of the value as per Section 4(1)(a) proviso (iii); but after allowing the deductions eligible on expenses incurred after removal, including the determination of the assessable value as per the decision of Srichakra Tyres case [1999 (108) E.L.T. 361 (T-LB)] of the Larger ..... X X X X Extracts X X X X X X X X Extracts X X X X
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