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TMI Blog2011 (3) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... ppearance: Shri.Bharat Raichandani, Advocate for appellant Shri.V.K. Singh, SDR, for respondent Per: P.R. Chandrasekharan 1. These appeals are directed against the order-in-original No.We/RKM/Th-II/2006 dated 29/09/2006 passed by the Commissioner of Central Excise, Thane-II. 2. The appellant M/s.Reliance Industrial Products are a partnership firm engaged in the manufacture of plastic pipes and fittings. They entered into a job work agreement with M/s.Kisan Mouldings Ltd., (KML in short) a public limited company, which is engaged in the manufacture of pipe fittings. As per the job work agreement, the raw materials, packing materils, etc. were to be supplied by KML to the appellants for the manufacture of plastic pipes and solvent cement and the goods so manufactured were returned to KML on payment of duty. The appellant paid Central Excise duty on the final products manufactured by them based on the Ujagar Prints formula i.e. cost of raw materials + cost of packing materials + job charges including the normal margin of profit. 3. The department conducted investigations and based on the information furnished by the appellant came to the conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s run, controlled and managed by the Board of Directors. It is their contention that the concept of relative as defined in Section 4 (3) (b) read with the Companies Act would apply to natural persons and not impersonal bodies like a public limited company and this view has been taken by the Hon'ble Allahabad High Court in the case of UOI Vs. Hind Lamp Ltd 1977 (1) ELT (J1) (All.) and the appeal of the department against the said decision was rejected by the Hon'ble Supreme Court, in the same case reported in 1989 (43) ELT 161 (SC). Similar view has been taken by the Hon'ble High Court of Delhi in the case of Jay Engineering Works Ltd., Vs. UOI, 1981 (8) ELT 284 (Del). Further, this Tribunal in the case of Kanchan Industries Vs. CC 2005 (186) ELT 302 had held that a partnership firm and a private limited company are not related persons inasmuch as they are not natural persons and a similar view has been held by the Tribunal in the case of J Foundation Vs. CCE, 2005 (191) ELT 1142. Therefore, the appellants contend that their firm and KML are not related persons in terms of Section 4 (3) (b) of the Central Excise Act. The appellant further contend that unless the Revenue conclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esumed. Accordingly, he submits that since the persons of the partnership firm and a few directors of the public limited company are relatives as defined in the Companies Act, it has to be deemed that the appellants and KML are related to each other and, hence, the price at which the related persons sells the goods shall be the basis for charging of excise duty. He further urges that the appellant was a manufacturer on his own prior to 01/04/2005 and he was selling the goods through his depots and the price at which he sold the goods was taken as the basis for discharge of excise duty liability. However, during the period from 01/04/2005 to 19/12/2005, the appellant became a job worker of KML and he was manufacturing the same goods namely pipes from the raw materials supplied by KML using his own machinery. Further, KML purchased the entire goods manufactured by the appellant and were effecting the sales through the same depots, which was earlier controlled by the appellants. Therefore, one has to go behind transaction and see how the transaction has been camouflaged by lifting the corporate veil. He also relies on the judgement of the Hon'ble apex Court in the case of Calcutta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se under consideration, we find that the parties involved are a partnership firm and a public limited company. Merely because some of the partners in the partnership firm and some of the Directors of the public limited company are relatives, it cannot be alleged that the partnership firm and the public limited company are related, because relationship as defined in the Companies Act read with Central Excise Act applies to natural persons and not to impersonal bodies like corporations. Therefore, the proposition in the show-cause notice and the findings of the impugned order that merely because some of the partners of the partnership firm and some of the Directors of the public limited company are relatives the firm and the company are related, has no legal basis whatsoever, especially in the light of the judgment of the Hon'ble apex Court in the case of Hind Lamps Ltd. The said legal position was affirmed by the Hon'ble apex Court in the case of Jay Engineering Works Ltd., referred to supra wherein it was held that concept of 'relative' has no application to impersonal bodies. 8. The department has also alleged that the party has changed their business practice i.e., prio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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