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TMI Blog2012 (7) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... d Judgment but without saying anything as to how those findings are applicable to the facts at hand. The Tribunal disposed of the appeal with the observation that the findings in the earlier case are clearly applicable to the facts of the present case. It is needless to restate that the question whether they are related persons within the meaning of Section 4 94) 9e) of the Act is to be considered with reference to the facts in each case. The Tribunal failed to advert even to the basic facts and disposed of the appeals in a summary manner interfering with the order passed by the authority. We find it difficult to sustain the order passed by the Tribunal. 2. M/s.Kwality Ice Creams (Madras) Pvt. Ltd. (in short, KIMPL ) was promoted by one Shri Rajiv Khanna and his family members in 1980 (Ref. Para 33.1 of OIO) and such concern was manufacturing ice cream till November 1995 with brand name Kwality which was developed by Shri Rajiv khanna. 76% of controlling interest in KIMPL was offered for sale on 9.12.94 (Ref. Para 12 of OIO). Sale of the manufacturing unit of KIMPL situated at Kuruchi Industrial Estate, Coimbatore was made with effect from 1.11.1995 in terms of an agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed by SCN dt. 3.7.2000 raising duty demand of Rs.21,22,455/- in respect of clearance made to BBLIL (later known as HLL) and subsequent period comprising 1.2.2000 to 31.12.2000 raising duty demand of Rs.10,70,652/- was proposed to be adjudicated by SCN dt. 1.3.2001 in respect of clearance made to HLL. Thus aggregate duty demand against KRFL for the above two periods was Rs.31,93,107 (Rs.21,22,455 + Rs.10,70,652). For these two periods, KFRL faced penalty under Rule 173Q and Section 11AC read with Rule 173Q of Central Excise Rules, 1944. Penalty for the first period was Rs.20,99,780/- while the second period visited with penalty of Rs.29,83,129/-. HLL also faced penalty of Rs.5 lakhs under rule 209A of CER 1944 in the adjudication. 8. Subject matter of allegations against KIMPL was that BBLIL was sole buyer of its products in terms of agreement between them and price was not sole consideration. So also market existed only in the hands of BBLIL. Assessable value was therefore intended to be determined with consequence of law. 9. HLL was issued SCN making allegation that entire product manufactured by KFRL was sold to HLL (formerly called BBLIL). There was no wholesale b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason on record to hold that the value declared by M/s.KIMPL and KFRL for the purpose of levy of duty of excise was not normal price in terms of Section4(1) (a) of Central Excise Act, 1944 and clearance value was depressed for which assessable value was re-determinable for levy of differential duty. The Authority also held that HLL was depressing the assessable value for which penalty should be levied on that concern also. 12. Learned Sr. Counsel, Shri Ravinder Narain appearing on behalf of KFRL submitted that notice was earlier issued on 9.5.96 proposing demand. But on adjudication that was dropped without appeal by Revenue. Thereafter, SCN dt. 3.7.2007 and 1.3.2001 were issued for the period Dec 95 to Feb 99 and for the period 1.2.2000 and 31.12.2000 respectively. That resulted in demand and the same is subject matter of impugned order under appeal pursuant to remand of the matter from apex court against appeal of Revenue by order dt. 9.11.2010. The demand in the present appeal is on the self same issue and dispute was resolved by OIO dt. 5.9.96 against SCN dt. 9.5.96 earlier. It was submitted that SCNs dt. 31.1.2002 and 23.9.2002 for subsequent period issued resulted in droppi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to discontinue or close down the manufacturing facility and there was nothing to show that BBLIL/HLL can compel Kwality Ice Cream to close down the factory or move it from its current location, apex court held in para-24 of its judgement as under : 24.?What is of importance is certain interdependence and reciprocity beyond the relationship of either a distributor or manufacturer so as to consider as to whether the parties are related persons . On the facts it is noticed, essentially the relationship between M/s. Kwality Ice Cream and BBLIL/HLL is one sided and the facts do not suggest that each one of them have interest direct or indirect, in the business of each other. The concept of mutual interest was explained in Supreme Washers P Ltd. Vs CCE - (2003) 1 SCC 142 as under :- .... having common stock of raw material and semi finished goods, having common use of machinery between the three units, having common marketing arrangements and free flow of finance between the three units cumulatively indicates interdependence of the three units with each other as also inter-relationship, cumulatively establishes the appellants inter relationships and interdependence with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, penalty is not imposable under Rule 209A of Central Excise Rules, 1944. 19. Ld. Representative appearing on behalf of Revenue submitted that agreement relied upon by BBLIL/HLL and KFRL prove controlling interest held by BBLIL / HLL which influenced assessable value of the goods manufactured by KFRL and KIMPL. Financial advances were given to these appellants and BBLIL / HLL participated in various decisions. Learned Adjudicating authority has brought out the manner how control was exercised by BBLIL / HLL over KIMPL and KFRL. Thus price was not sole consideration. Other considerations influenced the assessable value. Loss of Revenue was caused by undervaluation of goods. Adjudication was done properly basing on evidence for which that is sustainable. 20. Heard both sides and perused records. Periods involved and quantum of demand raised in the adjudication remained undisputed by either party. While Revenue has grievance of understatement of assessable value for different periods involved in the adjudication, Appellants deny the same. 21. The adjudication having arisen out of similar allegation against KIMPL and KFRL and on similar facts, the facts and circumstance and evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made was failed to be justified by Revenue. No objective analysis of cost data, no comparison of price of competitors goods was done. Neither adjudication order nor arguments of Revenue brought out any evidence of flow back. Managerial control was mere allegation without evidence to show how assessable value was depressed. No nexus was established between the decisions and pricing. No evidence surfaced to prove that the buyer of goods influenced sales price. 24. It was not brought on record to prove that KFRL and BBLIL/HLL were also related persons while the term related person dealt with by Section 4 (4) of Central Excise Act means a person who should be associated with an assessee and have interest, directly or indirectly including a holding company, a subsidiary company, a relative and a distributor of the assessee and any sub-distributor of such distributor. Such relation between appellants and BBLIL and HLL could not be established by Revenue. KIMPL and KFRL were totally different from BBLIL and HLL and had no interest to cause loss to Revenue existed. There was no material brought out on record to appreciate that both the parties were any way related to each other havin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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