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TMI Blog2014 (11) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute have been cited to come to the conclusion that two subsidiaries of one company are to be considered as one and there cannot be sale and purchase between the two. We are also unable to understand how the transactions between the two companies result in a situation that ownership of the chassis does not change hands. Even if it remains within the group, it does not mean that the supplier of chassis did not sell the busses to the appellants who built the chassis on the same. The Notification clearly provided exemption when the chassis is sold and body is built on it and no CENVAT credit is taken. The whole case is built on the premise that there cannot be a sale and purchase between two subsidiaries and transfer of ownership does not ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by M/s Volvo India Pvt. Ltd., which has resulted in the manufacture of motor vehicles viz., Volvo brand passenger Buses falling under Chapter heading 8702 1092 of CETA, 1985; * As per Note 5 under Chapter 87 of the Central Excise Tariff Act, 1985, building a body or fabrication or mounting or fitting of structures or equipment on chassis falling under Chapter Heading 8706 amounts to manufacture of a motor vehicle; * The appellants have not registered themselves under Central Excise Act, 1944 for the manufacture of buses, even though they have obtained the registration for the manufacture of the parts and components of motor vehicles on 21.08.2008; * The ER-1 returns filed by the Appellants for the period fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company in which AB Volvo (Publ) , Sweden has 100% ownership; * It is clear from various clauses in all the three agreements that the Appellants, M/s Volvo India Pvt. Ltd. and Volvo Bus Corporation Sweden are the subsidiary companies of the group of Volvo companies under AB Volvo (Publ) , Sweden and the proprietary rights of the Volvo products vests with the Volvo Group of Companies : * In the present case, even though the chassis are manufactured and sold by M/s Volvo India Pvt. Ltd. to the Appellants, the ownership of the Chassis does not change hands and remains within the Volvo group since the transaction is between the two companies of the same group and they are closely related. * Shri K Ramamurthy, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest involved in the activities undertaken by them within the group companies with the intention of claiming the undue benefit of the exemption notification. * The impugned order in original also confirms the imposition of penalty under rule 26 of the Central Excise Rules 2002, on Shri K. Ramamurthy, Company Secretary and the Director of the Appellants company for his acts of omission and commission in not making payment of duty on the bus bodies built on the chassis supplied by M/s Volvo India Private Ltd. 3. We have heard learned counsel in great detail even though the matter was listed only for considering waiver of predeposit and stay against recovery. We find that the learned Commissioner has come to the conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bus body 9400) or any other chassis Volvo Bus Corporation introduces to India through VIPL for the manufacture of complete Volvo Buses/coaches. As per the organizational structure of Volvo group, VIPL is the subsidiary of Volvo Truck Corporation, Sweden , As per clause 1.7 of the above Chassis Supply Agreement, 'Volvo Bus corporation may introduce any other Chassis to India through VIPL, (which is a subsidiary of Volvo Truck corporation, Sweden ) for the manufacturer of complete volvo Buses. The above indicates that the subsidiary companies within the volvo group have a control over each other along with mutuality of interest in the business of each other. We are unable to appreciate how the transactions discussed lead to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax and such provisions cannot be made applicable to the conditions and the central excise notification. It was also observed that the Notification is particular about the ownership of the chassis and according to the learned Commissioner if the ownership remains with one of the subsidiary which means the ownership has not changed with which we find ourselves unable to agree. In paragraph 32.2(ii), the Commissioner has observed that the provisions relating to setting up the price of the chassis which has to be done by mutual discussion and suitable price adjustments after such discussion shows that there is mutuality of interest in the business of each other. This also in our opinion is erroneous conclusion. Moreover even if VBT and VIPL are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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