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TMI Blog2009 (8) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... ere held by Cromwell Group Holdings Ltd. (CGL) and other 50% were held by four Indian companies, which were basically from the same group of MGL. The joint venture company (JVC) was set up on the basis of Memorandum of Understanding (MoU) between M/s. Piramal Enterprises Ltd. (PEL) and CGL entered into on 31-1-96. On 26-9-96, a distribution agreement was signed between MT and CTIL. CTIL was appointed as an authorized distributor of MT and they were to purchase substantial portion of the product at prices negotiated from time to time. Pursuant to agreement, MT stopped selling and distributing its products except to bulk end users and CTIL started purchasing the goods from MT, selling and distributing them. After investigation and adjudicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e even said that MT has a controlling interest. Therefore, the findings of the Commissioner that CTIL was shadow marketing agency or dummy agency, does not emerge from the facts arising from the investigations of the case. 3.2 Further, he also submitted that there are factual errors in the findings of the Commissioner. He submits that the observations of the Commissioner that Shri Ajay G. Piramal was a Managing Director-cum-Chairman of CTIL, was not correct and Shri Ajay G. Piramal was not even a Director in CTIL. 3.3 The findings of the Commissioner that MGL and appellants were under the control of PEL is also contrary to the facts since PEL has no share holding in CTIL and did not have any Director on the Board of CTIL. 3.4 There was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, PF etc, which is a normal standard practice in such a situation. Learned advocate drew our attention to the list of 103 employees who are recruited afresh by CTIL to show that the CTIL, in fact, opened more offices and recruited extra people besides using the employees of MT and the premises which were earlier in use by MT. 3.7 He also submits that the Commissioner has selectively relied upon the statements of the various employees ignoring material part of those statements. For example, he submits that Shri Deshpande had categorically stated that the appellant did not deal with only production of MT but with the production of other companies, and imported the goods, this part has been totally ignored. Similarly, the Commissioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has to be held that this finding cannot be the basis for charging duty on the basis of price at which CTIL sells the goods to the customers. It has to be established that CTIL and MT were related persons. As rightly pointed out by the learned advocate that there is no mutuality of interest proof MT and CTIL. 50% of the shareholding in CTIL was with CGL, a British company. Revenue has not proved any proof to show that CGL was a part of the conspiracy or was aware of all these implications. When two groups held shareholding of 50-50 in the company, both will have equal control and therefore, it cannot be said that MT had controlling interest. Further, even if it is assumed that sister companies could influence, the fact remains that the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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