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TMI Blog2016 (10) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... s which have direct bearing on the valuation. The declarations filed by the main appellant, as claimed, does not throw light on any of these aspects. The extended period is rightly invoked - demand of duty and penalty rightly imposed - appeal rejected - decided against assessee. - Excise Appeal No. E/385-387/2008-Ex[DB] - Final Order No. 53787-53789 /2016 - Dated:- 27-9-2016 - Mr. S. K. Mohanty, Member (Judicial) And Mr. B. Ravichandran, Member (Technical) Mr. Seema Jain (Advocate) for the Appellant Mr. R.K. Manjhi, DR for the Respondent ORDER Per B. Ravichandran These 3 appeals are against order dated 19.11.2007 of Commissioner of Central Excise, Delhi. The main appellant [Ms. Karan Engineers Pvt. Ltd. (KEPL)] are engaged in the manufacture of Motor Vehicle Parts liable to Central Excise duty. In June 2006, certain investigations were carried out by the Officers of Central Excise Commissionerate, Delhi-II. It was observed that KEPL were clearing all their manufactured goods to M/s DD Industries Ltd. (DDIL) who in turn were further clearing the goods to a trading firm M/s DD Sales Corporation (DDSC). KEPL and DDIL were private limited and limited companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents to DDIL Unit-II which was captively used by the DDIL. It was submitted that sale price of DDSC cannot be taken for goods captively consumed by DDIL. Similarly, the discounts allowed by DDSC to the unrelated customers should be allowed on actual basis. The turnover discounts and cash discounts as reflected in the balance-sheet are clearly admissible to determine the value based on DDSC sale. The DDSC sold goods to replacing market and such price is on cum duty basis. Finally, the Ld. Counsel for the appellants contested the demand on the ground of time bar. It was submitted that they have filed declaration under erstwhile Rule 173(C) giving all the details of their sales pattern and as such there is no substance in the allegation of suppression etc. 4. The Ld. AR supported the impugned order. He specifically referred to the fact that the major shareholder of KEPL, DDIL and partners of DDSC were all directly related to each other. DDIL is actually having effective control over KEPL and DDSC. It is clear from Annexure B of the Balance-Sheet of DDIL which declares that it has significant influence on DDSC and Daulat Leasing and Finance Company which is a parent company of KEPL. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent persons and exercised significant control over the same. 8. Since the nature of relationship among KEPL, DDIL and DDSC has to be analyzed based on facts relevant to the period, the observation of the original authority on these facts are relevant. The original authority observed from para 13.2 to 13.10. 13.2 M/s. KEPL and M/s. DDIL were Private Limited and Limited Companies respectively, whereas M/s. DDSC was a partnership firm. Both the said companies and the said trading firm have their own Price Lists which differ from each other. The selling price of all the goods appear to be increased at all stages from KEPL to DDSC. It appeared that selling price of any given motor vehicle part was lowest when sold by M/s. KEPL to M/s. DDIL and highest when sold by M/s. DDSC to its dealers and distributors. It further appeared that both the two companies, KEPL and DDIL and the partnership firm, DDSC are interconnected entities controlled by common management headed by the Gambhirs and their family members. It would be worthwhile to look at the persons controlling the company/firm at the material time which is detailed below :- (a) As per the records of the firm M/s. DDIL the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umari who was wife of Shri Surinder Gambhir, that Shri Tarun Kumar was nephew (Sister s son) of Smt. Uma Kumari, that Shri Tushar Kumar was Shri Surinder Gambhir s daughter s son. (D) Statement dated 20-2-2007 had been tendered by Shri Tarun Kumar one of the Directors of M/s. KEPL during the material period wherein he categorically stated that he worked as a Director of M/s. KEPL without any remuneration as to gain experience of tie rod ends; that the said product was not successful he worked without any remuneration; that he had his own private business to earn his livelihood. (E) Similarly statement dated 21-2-2007 was recorded u/s 14 ibid of Shri Tushar Kumar one of the Directors of M/s. KEPL since 2005 wherein he categorically stated that he had been one of the Directors of M/s. KEPL since 2005; that he was working as Business Head at D.D. Motors Dehradun, that as Business Head he looked after entire dealership operations and supervisory work of DD Motors Dehradun; that he had been working at DD Motors Dehradun since July, 2004; (It would be pertinent to add here that DD Motors is one of the Division of DDIL); that he had visited KEPL B-145, Mayapuri Phase-I only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise and accounting that Shri D.K. Jain who was working in M/s. DDIL at that time gave them orders for manufacturing goods and they manufactured goods as per his direction; that they gave details of required raw materials to Shri D.K. Jain who sent them the said raw material, that Shri N.K. Aggarwal was earlier working as a senior officer in their company and he quitted in February, 2002; that Shri N.K. Agarwal had been working in DDIL since March, 2007 and that he was not getting any salary or remuneration from their company at that time but he signed cheques of their company; that according to the documents Mr. Vipin Kumar and Mr. Tushar Kumar were Directors of KEPL but they never received any remuneration from the company. That both Directors hardly (very less) came to the factory. 13.9 Fourthly, Sh. G.C. Verma Production Incharge of M/s. KEPL in his statement tendered under Section 14 ibid on 30-6-2006, inter alia, stated that he had been working as Production Incharge in KEPL since 1987 and he looked after production of motor vehicle parts of different models; that Shri D.K. Jain, Sales Manager DDIL used to direct him for day to day production of different models of vehi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control, directly or indirectly whether a director or were otherwise from the body corporate then also they will be treated as interconnected undertakings. The facts recorded by the original authority is that DDIL is having effective control on DDSC and M/s Daulat Leasing and Finance (Pvt.) Ltd. The said Daulat Leasing during the period 2002 to 2006 has significant shareholding in KEPL. The various members of Gambhir family had significant shareholding in Daulat Leasing. These details are elaborated in para 1.5 and 1.6 of the impugned order. DDSC was a partnership, the partners are holding almost all the paid up shares either directly in their own name or indirectly in the name of their spouses, children or other relatives. It is evident that the policy and management decisions are made to benefit the family members having interest in all the 3 entities. DDIL and KEPL and DDSC are having interest in each other as all are entirely owned or controlled by the Gambhir family in view of the facts recorded in the impugned order. It is an admitted fact that DDIL is the owner of the brand and 100% of the product manufactured by the KEPL are supplied only to them. DDIL in turn sells the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 34.5% alone was non-refundable and any discount over and above this depends on the instance of sales tax etc. Regarding the turn over discounts, the scheme of such discounts has to be pre declared before clearance of excisable goods, no evidence to this effect has been submitted before us. Discounts decided after sale cannot be considered. We also note the other issues on valuation like freight, packing etc. have also been dealt with by the original authority and we find no reason to interfere with the same. Regarding cum duty value, the original authority finding is recorded at para 21.1 relying on the decision of Hon ble Supreme Court in the case of Amrit Agro Industries Ltd. 2007 (210) ELT 183 (SC). Regarding the question of demand being for extended period, we find the issue involved in the present case whether the transaction value adopted by the main appellant is acceptable or not has been decided after detailed verification by the Department. The investigation brought out facts which have direct bearing on the valuation. The declarations filed by the main appellant, as claimed, does not throw light on any of these aspects. We find that the extended period is rightly invok ..... X X X X Extracts X X X X X X X X Extracts X X X X
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