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TMI Blog2016 (9) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of each other. - Demand set aside - Decided against the revenue. - E/504 to 506/05-Mum E/CO/203, 196 & 195/05-Mum - A/89391-89396/16/EB - Dated:- 26-7-2016 - Mr. M.V. Ravindran, Member (Judicial) and Mr. C.J. Mathew, Member (Technical) Shri N.N. Prabhudesai, Superintendent (AR), for appellant Ms. Padmavati Patil, Advocate, for respondent ORDER These appeals are directed against order-in-appeal No. PI/131 to 133/04 dated 27.10.2004 and are filed by the Revenue. 2. The relevant facts that arise for consideration are M/s. Precision Seals Manufacturing Ltd. (PSML) is engaged in the manufacture of goods falling under Chapter 40 of the Central Excise Tariff Act, 1985. The lower authorities were of the view that P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersons under Section 4(4)(C) of the Central Excise Act, 1944. He would rely upon the decision of the Hon ble Supreme Court in the case of Flash Laboratories Ltd. vs. CCE, New Delhi reported in 2003 (151) ELT 241 (SC), CCE, Mumbai-V vs. J Foundation reported in 2015 (324) ELT 422 (SC), Narendra Machine Works (P) Ltd. vs. CCE, Rajkot reported in 2001 (128) ELT 118 (Tri.-Del.) and LMS Tool Room vs. CCE, Rajkot reported in 2002 (139) ELT 199 (Tri.-Del.), for the proposition that the value in respect of the finished goods sold by the related person needs to be considered for discharge of duty liability. 4. The learned Advocate, on the other hand, would draw our attention to the facts of the case and submit that the issue of mutuality of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terconnected/related parties and hence the value for discharge of excise duty needs to be based upon the prices of KBX. The reasoning given by the adjudicating authority is that KBX is holding 60% of the shares of PSML, KBX had corporate guarantee and had extended advances and also technology for manufacturing of finished goods. This would indicate mutuality of the interest. 8. We find that the first appellate authority, while arriving at the conclusion that there was no mutuality of interest, has recorded the following findings:- I have carefully gone through the records of the case as well as the various submissions made by the appellants. The allegation is that M/s. PSML and M/s. KBX are related persons and therefore the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n no way go to prove that M/s. PSML has any interest in the business of M/s. KBX. In the present case therefore the mutuality of interest in the business of each other is not established. The Tribunal in the case of M/s. Y N Shah V/s. CCE Mumbai II [2004 (170) ELT 353] has held that distributor company holding shares in its manufacturing unit would not become related person even if it sold major part of goods of the manufacturer or they had received unsecured loans from the manufacturer as two way flow-back is essential. The Tribunal also in the case of Beacon Neyrpic Ltd. V/s. CCE Madras [2001 (133) ELT 590] has held that even in the case of manufacturer selling 100% of their goods to company holding 60% of its shares, in absence of fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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