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TMI Blog2017 (3) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... A/86060/17/EB - Dated:- 27-2-2017 - Mr. Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) Shri.Sanjay Hasija, Supdt. (AR) for appellant None for respondent ORDER Per Ramesh Nair 1. The respondent M/s.APR Packaging Ltd. are engaged in the manufacture of paper and paper sacks falling under sub-heading No.4804.90, 4805.00 and 4819.19 of the CETA, 1985 and they cleared their finished goods, i.e. craft paper to their sister concern, viz., M/s.Ballarpur Industries Ltd. The department contention is that the respondent s sales transaction with various units of Ballarpur Industries Ltd. are sales to related persons which includes interconnected undertaking as defined in the Monopolies Restrictive Trade Practi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the respondent. 4. We have carefully considered the submissions made by both sides. 5. We find that the department has proposed valuation under Rule 8 on the ground that the appellant is an interconnected undertaking of the buyer which is M/s.Ballarpur Industries Ltd. We find that as per Section 4 (iii) (b), the related person includes (i) if they are interconnected undertaking; (ii) they are relatives (iii) amongst them the buyer is a relative and a distributor of the assessee, or a sub-distributor of such distributor; or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. As per Rule 9 of Central Excise Valuation Rules, 2000, the sales made through an interconnecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L). There has also not been any additional monetary consideration ever flowed from the buyer to the appellant factory. Although the concept of mutuality of interest has not been discussed at length in the show cause notice, however, the adjudicating authority under para 18 (i) at page 12 of the order-in-original has discussed certain facts on this account which are required to be put to test of law laid down by the apex court. Hon ble Supreme Court in 1984 (17) ELT 323 (SC) has examined the matter of mutuality of interest and observed as under: Related person - Meaning of expression a person who is so associated with the assessee that they have interest directly or indirectly to the business of each other - One Company holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness of the other may be different; the interest of one in the business of the other may be direct while the interest of the latter in the business of the former may be indirect, but that would not make any difference so long as each has got some interest direct or indirect in the business of the other. In cases, where 50% share of the manufacturing Company is held by the customer Company, the customer Company can be said to be having interest in the manufacturing Company as a shareholder but for this reason, it cannot be said that the manufacturing Company has any interest direct or indirect, in the business carried on by one of its shareholders even though the shareholding of such shareholders may be 50%. In the absence of mutuality of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company, a relative and a distributor of the assessee and any sub-distributor of such distributor. It has been held by the Supreme Court in the case of U.O.I. v. Atic Industries, 1984 (17) E.L.T. 323 (S.C.) that it is not enough that the assessee has an interest directly or indirectly in the business of the person alleged to be a related person nor is it enough that the person alleged to be related has any interest directly or indirectly in the business of the assessee. It is essential to attract the applicability of the first part of the definition that the assessee and the person alleged to be a related person must have interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mills Co. (TMOCO) who entered into an agreement with the respondents for manufacture and supply of detergent cakes under the brand name Super 501 was to be regarded as wholesale dealer and the assessable value of the goods cleared by the respondents was to be determined under Section 4(1)(a) and not under Section 4(1)(b), would be squarely applicable. The Tribunal s Order in the case of Naga Detergent has been upheld by the Hon ble Supreme Court, as seen from the report in 1996 (86) E.L.T. A317. 6. It is also not disputed by the Revenue that there are other partners in the assessee firm as well as there are other directors in M/s. Marc Lab. Thus, one common person will not make a partnership firm related person of a company. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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