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TMI Blog2011 (3) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee over the affairs of the distributors - There is no finding of the entities operating common funds as if they are a single entity - There is no sharing of profit - Held that ther are not related person - Decided in favour of assessee. - E/180/06 - - - Dated:- 8-3-2011 - Hon'ble Mr. M.V.Ravindran, Member(Judicial) Hon'ble Mr. P.Karthikeyan, Member(Technical) Appearance Ms. Sudha Koka, SDR for the Revenue. Mr. R.C. Saxena and Mr. Saurabh Dixit, Advocates for the respondent. Per P.Karthikeyan This is a Revenue appeal. The respondent is a manufacturer of bulk drugs and has sold its production during the material period through its distributors. The assessee M/s. Themis Medicare Ltd. (Themis for short) is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l price as defined in Section 4(1)(a) main definition clause and the assessee arranges to sell the goods ordinarily to, or through, a related person in terms of proviso (iii) to Section 4(1)(a).This proviso (iii) read as follows. (iii). Where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons), who sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had mutuality of interest and were related. Moreover, the buyer and the seller were the same person masquerading as different persons behind their corporate veils. The learned SDR supported this submission relying on the Apex Court's judgment in the case of Calcutta Chromotype Ltd. Vs CCE [1998(99)ELT202 (SC)]. 6. We find that the Show Cause Notice does not discuss the composition of the Board of Directors of the assessee or distributors, their shareholding pattern and show that the assessee and its distributers are the same person. The position that one or more Directors in the assessee company is also Director in one or other buyer company alone cannot lead to the inevitable conclusion that the entities are one and the same. Two corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airs of the distributors as argued by the ld. SDR. There is no finding of the entities operating common funds as if they are a single entity. There is no sharing of profit. We observe that the following attributes of the entities could justify a finding that they are related. (1) Mutuality of interest of the units, (2) Financial flow back and distribution of profit. (3) Separate entity only a facade (4) Common management. 7. We find that these elements do not define the relationship/transactions between the assessee and its distributors. In the circumstances we hold that the impugned order is in accordance with law and does not call for any interference. The appeal filed by the Revenue is rejected. (Operative portion of this ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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