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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 ..... ods falling under Chapter 40 of the Central Excise Tariff Act, 1985. The lower authorities were of the view that PSML was indulging in evasion of central excise duty by undervaluing their products by selling the same at substantially higher prices through their related person, M/s. Kalyani Brakes Ltd. (KBX). After concluding the investigation at PSML and KBX premises, show cause notice was issued for demand of the duty and for imposition of penalties. The adjudicating authority, after following the due process of law, held that the demand of the duty needs to be confirmed along with interest and penalties were also imposed on KBX and another individual holding that PSML and KBX were related persons and that KBX provided mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility. 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 interest has not been satisfied by the Revenue in their submissions. She would draw our attention to the decision of the Honble Bombay High Court in the case of Dawn Apparels Ltd. vs. UOI reported in 1989 (43) ELT 401 (Bom.), UOI & Ors. vs. Atic Industries Ltd. reported in 1984 (17) ELT 323 (SC), Alembic Glass Industries Ltd. vs. CCE reported in 2002 (143) ELT 244 (SC) and CCE, Chennai vs. Beacon Neyrpic Ltd. reported in 2006 (193) ELT 16 (SC), for the proposition that KBX may have an interest in the unit of PSML by virtue of holding 60% of the shares but PSML has no interest in KBX as nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 at which the goods are being sold by M/s. KBX should be the value for payment of duty by M/s. PSML. The allegation that they are related persons is based on the fact that M/s. KBX is the holding company having 60% equity shares in M/s. PSML; that technical information and assistance were provided by M/s. KBX to M/s. PSML; that M/s. KBX have provided 8 moulds free of charge to M/s. PSML; that M/s. PSML has produced goods as per specifications provided by M/s. KBX; that as they are holding subsidiary companies there is an inbuilt mutuality of interest in the business of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 finding of mutuality of business interest the companies are not related persons. The Supreme Court in the case of Alembic Glass Ind. Ltd. V/s. CCE [2002 (104) ECR 308 (SC)] has once again held that when the manufacturer and buyer are both limited companies having common directors and holding shares in each other's company, they cannot be held to be related persons in the absence of mutuality of interest. In view of the above facts and circumstances the essential ingredient of mutuality of business interest is not established in this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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