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TMI Blog2018 (6) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... ocate for the appellant that their transaction with PSSTL and BAI are not sales to “Related Person” is rejected - In the present case the price charged by the appellant from PSSTL and BAI was lower then the price charged from un-related buyers, and therefore, the appellant is liable to pay the demand on the basis of price charged to un-related buyers by resorting to Rule 11 read with Rules 4 of Valuation Rules. Extended period of limitation - Held that:- Since the unit has been subjected to audit periodically, the price declaration have been extensively scrutinized with the related documents and therefore the Department could not allege any suppression on the part of the Appellant and could not have invoked extended period of limitation for demanding duty - The malafide intention to evade payment or suppression also cannot be attributed to the Appellant - extended period of limitation cannot be invoked. The matter is remanded to the Adjudicating Authority for the limited purpose of re-calculating the demand for the period which is within limitation alongwith interest and penalty, if any, after hearing the appellant on this limited aspect - appeal allowed by way of remand. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 was issued to the appellant as to why: (a) Total Central Excise Duty amounting to ₹ 65,00, 776/- (Rupees Sixty Five Lakh, Seven Hundred and Seventy Six only.) short paid by them on clearances made to the related unit/ interconnected undertakings during February 2009 to August, 2013 should not be recovered from them under proviso to Section 11A(1) or under Section 11A (4) of the Central Excise Act, 1994 [as the case may be], by invoking extended period of five years. (b) Mandatory penalty equal to the amount adjudged payable Section 11 A(1) or under Section 11A(4) of the Central Excise Act, 1944 {as the case may be} should not be imposed on them, under Section 11 AC or under Section 11 AC (1) (a) {as the case may be} of Central Excise Act, 1994 read with Rule 25 (1) of the Central Excise Rules 2002. (c) Interest at the prescribed rate should not be charged and recovered from them under Section 11 AB or 11 AA of the Central Excise Act, 1944 as the case be. 3. The adjudicating authority through a detailed Order-in-Original dated 24.03.2015 confirmed the demand of Central Excise Duty (including cess) amounting to ₹ 65,00,776/- short paid by the appellant on cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 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. Explanation.-In this clause- (i) inter-connected undertakings shall have the meaning assigned to it in clause (g) of section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (64 of 1969); and (ii) relative shall have the meaning assigned to it in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956); Section 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the conditions prescribed in Rule 10 of Central Excise Valuation Rules 2000 regarding buyer being a holding a company or subsidiary Company of assessee or their relationship in terms of Clause (ii), (iii) or (iv) of Section 4(3)(b) of Central Excise Act, 1994 has to be satisfied. We have gone through that decision and found that in that case these conditions which are present in the instant matter were nowhere referred or discussed and no evidence was provided to establish that the two companies have interest in each others business. 7. On the present matter, Audited Balance Sheet and tax audit report itself discloses that all the three firms including the appellant are related parties and all the Directors/ partners for the said three firms are relatives among themselves and holding key managerial position. Therefore there is no doubt left that the appellant and PSSTL and BAI are interconnected undertakings and it has been admitted also. Now the only question to be seen is whether they fulfill the conditions laid down in clauses (ii), (iii) or (iv) of Section 4(3) (b) of the Act. Although a company, Partnership firm, Body Corporate, HUF, trust cannot be a relative of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on as under: Name of Partners Profit Sharing Ration 1. Shri Ritesh Ahuja (Son of Shri Suresh Ahuja) 2. Shri Nitesh Ahuja (Son of Shri Rajesh Ahuja) 3. Smt. Mala Ahuja (wife of Shri Suresh Ahuja) 4. Smt. Rekha Ahuja (Wife of Shri Rajesh Ahuja) 30% 30% 20% 20% It is seen from the above arrangements in all the three companies that the key managerial positions held by them and the mutuality of interest amongst each other and the interest, directly and indirectly in each other s business is clearly evidenced. 9. In view to the above facts it is establish that all the three companies falls under the ambit Related Persons . Therefore, the contention of the ld. Advocate for the appellant that their transaction with PSSTL and BAI are not sales to Related Person is rejected. The decision relied upon by the ld. Advocate for the appellant in the matter of Oriental Steel (supra) is also distinguishable from the fact that in the present case the demand has been made in the Show Cause Notice by invoking Rule 11 read with Rule 4 of Valuation Rules whereas in the Oriental Steel matter (supra) the demand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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