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TMI Blog2010 (4) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... r sales to MRO TEK was mutually agreed and lower than CAS-4 for a portion of time during the relevant period, a conclusion cannot be drawn that there was an intention to evade duty - appeal is allowed X X X X Extracts X X X X X X X X Extracts X X X X ..... 9% of voting shares in the appellant company are held by MRO TEK and two of the five Directors of the appellant company are also the Directors on the Board of MRO TEK. Therefore, the noticee company and MRO-TEK can be considered as two undertakings which are under the same management or controlled by same persons are group in terms of MRTP Act, 1969. The Commissioner has also observed that the appellants did not dispute this. Even before us, the learned Counsel did not contest this point and instead, submitted that even if the two parties in this case namely, the appellants and MRO TEK are held to be interconnected undertakings, they can be deemed to related only if they are so associated with their interest directly or indirectly in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in getting raw material supply, getting various approvals from Government, etc. She also submitted that in addition to the above, the registered office of the appellants was located in the premises owned by MRO TEK and no rent was charged by MRO TEK. She submitted that according to the department, the approximate rent that may be payable in this case would be about Rs. 1,00,000/- per month. Further, she also submitted that machinery and equipment have been leased to the appellants company at nominal rent of Rs. 15,000/- per month and the factory was also charged at nominal rent of Rs. 7,000/- per month. Further, she also submitted that both the appellants and MRO TEK were parties to a case of duty evasion detected in respect of imported co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the year 2001-02, 2002-03 and 2006-07 supports the case of the appellants. He submitted that they have made a calculation as per CAS-4 and worked out the amount of duty payable, if Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, were to be followed as contended by the department during the relevant period and the duty actually paid by them and they found that the appellants Company had, in fact, paid excess duty of Rs. 60,34,225/- as against total duty payable amounting to Rs. 57,71,817/- in terms of CAS-4. He submitted that in the year 2002-03, the department's work sheet shows a much larger amount is payable, since CAS-4 has not been followed by the department while working out differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 1984 (17) E.L.T. 323 (S.C.). In fact, the Commissioner himself observed in his order that one another important factor that points out existence of mutuality of interest is whether by virtue of said mutual interest any extra commercial consideration have led to artificial lowering of the price of the goods sold by the appellants. He has observed that the transaction value adopted is lower than the cost of production. Unfortunately, he omitted to note the point that the transaction value adopted in this case was lower than the cost of production only in respect of period in 2002-03 and 2006-07 and in fact, in between period, even going by the method adopted by the department, the appellants have discharged excess duty. This aspect has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n support of his contention that department has not made out a case that both the parties are related to each other. We find that the evidence gathered and the facts brought on record are not sufficient to come to the conclusion that the appellants and MRO TEK are related persons. Therefore this charge fails. 7. As regards the second issue relating to limitation, in view of the fact that whatever duty paid by the appellants was available as Cenvat credit to MRO TEK, the department is required to show by supporting evidence that there was an intention to evade payment of duty. Merely because the price declared for sales to MRO TEK was mutually agreed and lower than CAS-4 for a portion of time during the relevant period, a conclusion c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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