9911796707
TMI Blog2007 (3) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... ,47,49,315/- on Camphor and its by-product manufactured by the appellants herein and cleared during the period February, 2004 to May, 2005, and imposed penalty of equal amount. The duty has been confirmed on the ground that the appellants (hereinafter referred to as M/s. DPL) and one of its buyers M/s. Royal Chemicals (Proprietary concern) are inter connected undertakings within the meaning of Section 2(g) of the Monopolies and Restricted Trade Practices Act, 1969, and therefore, the price of Rs. 118.56 being the price at which M/s. Royal Chemicals has sold Camphor to its customer during the Financial Year 2001-2002 was to be adopted as the price for all goods manufactured and sold by M/s. DPL to M/s. Royal Chemicals during the period in di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is so. As per Section 4 of the Central Excise Act, after its amendment on 1-7-2000, persons shall be deemed to be related if they are inter connected undertakings. The explanation to the Section states that inter connected undertakings shall have the meaning assigned to this expression in clause (g) of Section 2 of the MRTP Act, 1969. Section 2(g) of the MRTP Act defines inter connected undertakings as "two or more undertakings which are inter connected with each other in any of the following manner, namely - (i) if one owns or controls the other, (ii) where the undertakings are owned by firm, if such firms have one or more common partners, (iii) where the undertakings are owned by bodies corporate, (a) If one body corporate manages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h body corporate holds not less than (one fourth) of the equity shares in the other or controls the composition of not less than (one fourth) of the total membership of the Board of Directors of the other; or (iv) if one or more directors of one such body corporate constitute, or at any time within a period of six months immediately preceding the day when the question arises as to whether such bodies corporate are under the same management, constituted (whether independently or together with relatives of such director or the employees of the first mentioned body corporate) one-fourth of the directors of the other; or (v) if the same individual or individuals belonging to a group which holding (whether by themselves or together with thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (x) Explanation-II : If a group exercises control over a body corporate, that body corporate and every other body corporate, which is a constituent of or controlled by, the group shall be deemed to be under the same management. Explanation-III : If two or more bodies corporate under the same management hold, in the aggregate, not less than (one-fourth) equity share in any other body corporate, such other body corporate shall be deemed to be under the same management as the first mentioned bodies corporate. Explanation-IV : In determining whether or not two or more bodies corporate are under the same management, the shares held by (financial institutions) in such bodies corporate shall not be taken into account." 3. The finding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. We also note that besides the above finding based on the provisions of law, the material on record is not sufficient to hold that DPL and the trading firms were inter connected undertakings. 4. We also agree with the appellants that the price of Rs. 118.56 cannot be adopted to constitute assessable value of the goods sold by DPL for the purpose of determination of duty liability on goods manufactured by DPL, for the reason that not only is this price only an average price but is also the price at which camphor manufactured by DPL and sold to Royal Chemicals was in turn sold by Royal Chemicals in the financial year 2001-02 which is much prior to the period in dispute in the present appeal. Further, the price cannot also be adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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