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TMI Blog2017 (5) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the said Raj Iron Foundry, hold directly or indirectly, not less than 50% of the shares, whether a preference or equity, of the appellant company or exercise control, directly or indirectly, whether as Director or otherwise over the body corporate, as defined under section 2(g) of Monopolies and Restrictive Trade Practices Act, 1969 as made applicable to the definition of “related persons” under the Central Excise Act - neither the allegation of related person is sustainable nor the allegation of interconnected undertakings which although have not been established or averred - appeal allowed - decided in favor of appellant. - Excise Appeal No.313 of 2012 - A/53526/2017-EX[DB] - Dated:- 25-5-2017 - Shri Anil Choudhary, Member (Judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant assessee are paying royalty charges to the said firm Raj Iron Foundry for use of its brand name RIF . Moreover, the appellant are procuring orders in the said partnership firm namely, Raj Iron Foundry, Agra and goods are being manufactured in the appellant s factory at Dholpur, Rajasthan and are being supplied at lower rates in comparison to such goods cleared to other independent buyers. Hence it appeared to the Department that the said partnership firm namely, Raj Iron Foundry, Agra is a related firm of the appellant, as financial flow has been established between the two undertakings as they are procuring order in their partnership firm and supplying material from their private limited company, at lower rate than to other in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t related persons and the courts below have erred in holding them as related persons only on the ground that the two Directors of the appellant company are also the partners in the said partnership firm. The impugned order is silent about the clarification issued by CBEC through Circular No.643/34/2002 CX dated 01.07.2002, wherein at Sl. No.9 it is provided on cash discount and admissible discount? Answer- Since valuation is now based on transaction value, the cash discount if actually passed on to the buyers, will be allowed as deduction, the transaction being on principal to principal basis. It is further urged that it is settled legal position that cash discount is permissible. It is evident from the records that the appellant had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded in the books of accounts and proper returns filed with the Department. The said allegation of suppression does not stand and the demand for extended period is set aside. 5. Ld. AR for revenue relied on the impugned order. 6. Having considered the rival contentions, we find that as defined under section 4(3)(b) of the Act, person shall be deemed to be related. If (i) they are interconnected undertakings, (ii) they are relatives, (iii) amongst them the buyer is a relative and the distributor of the assessee or sub distributor of such distributor or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. 7. From the aforementioned definition we are satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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