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TMI Blog2018 (11) TMI 1451X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants is either alleged or evidenced. M/s.JTC are not also held to be interconnected undertaking. Therefore, the situation enumerated in Section 4 (3) (b) of the Central Excise Act, 1944 are not fulfilled. The only fact that M/s. JTC has a temporary office in the premises of the appellants. Some staff members of M/s. JTC are sitting there, by itself cannot be become a valid ground to hold them to be related. Over-riding commission paid by the appellants to M/s. JTC - Held that:- It cannot be by any stretch of imagination leveled to be a flow back of money. Only in case where the appellants have received certain money from their customers influence of such consideration on the price at which the goods are sold can be a thought of. Time Limitation - Held that:- The appellants have been regularly filing the required declaration under Rule 173C (iii) (a) giving the details of the marketing pattern and interalia mentioning the fact that M/s.JTC have premises at the appellants. Therefore, no suppression of fact can be alleged - The period covered in the show-cause notice is from October 1999 to March 2003 and show-cause notice has been issued on 20/05/2005. Abinitio also th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of ₹ 18,10,443/- on goods cleared to M/s.JTC by the appellant, M/s.RDCPL (ii) confirming duty of ₹ 6,94,924/- on the over-riding commission paid by the appellants to M/s.JTC (iii) imposing penalty of ₹ 25,05,367/- on the appellants, i.e. M/s.RDCPL under Section 11AC of the Central Excise Act, 1944; (iv) imposing penalty of ₹ 5.00 lakhs on the appellants, M/s.RDCPL under Rule 173Q and Rule 25 of Central Excise Rules, 2001/2002 (v) imposing penalty of ₹ 5.00 lakhs each on Shri H.J. Rathi and Shri S.H. Rathi of M/s.RDCPL and lastly (iv) imposing penalty of ₹ 5.00 lakhs on Shri H.J. Rathi in his capacity as Trustee of Smt. Chandravatibai Laddha Trust (Partner of M/s.Jagat Trading Corporation). The Commissioner (Appeals) vide order-in-appeal No.YDB/447 to 450/RGD/2010 dated 13/08/2010 has upheld the order of lower authority. Therefore, all the four concerned i.e., M/s.RDCPL, Shri H.J. Rathi, Shri S.H. Rathi and Shri H.J. Rathi are filed four appeals. 3. As all the four appeals are arising out of the same show-cause notice, the same are taken up together for disposal. 4. Heard both sides and perused the records of the case. 5. The learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation with M/s.JTC or M/s.JTC have not share holding in the appellants Limited Company. Therefore, in the absence of mutuality of any business interest and in the absence of flow back of any financial benefits from M/s.JTC to appellants. There is no allegation of M/s.JTC being company interconnected undertaking in terms of MRTP Act 1960 in terms of Section 4 (3) (b) (i) of Central Excise Act, 1944. Therefore, this cannot be held to be in his relative in terms of any provisions of Section 4 of the Central Excise Act, 1944. Learned Counsel for appellants has relied upon the following cases: a) UOI Vs. Atic Industries Ltd. 1984 (17) ELT 323 (SC) b) Alembic Glass Industries Ltd. Vs. CCE 2002 (143) ELT 244 (SC) 5.3 Learned Counsel for the appellants has also submitted that it was alleged that M/s.JTC was related as partners of M/s.JTC were relatives of the appellants/directors and M/s.JTC of the appellant; on occasions goods were moving directly from the appellants factory to M/s.JTC customers under the cover of M/s.JTC invoice and certain staff of M/s.JTC were sitting in the appellants premises. It is submitted that even when such conditions existed, it does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case are that M/s.JTC belongs to a Trust i.e., Smt.Chandravatibai Laddha Trust, in which Shri H.J. Rathi is said to be the Manager. The Trustees are partners in M/s.JTC. Shri HJ Rathi is the Managing Director of M/s.RDCPL. Further for the very reason that Shri HJ Rathi is the Managing Director of M/s.RDCPL and the Manager of a Trust, which is partner in M/s.JTC cannot be the sole reason for holding that the appellants and M/s.JTC are related. It can be seen that the appellants are a private limited company whereas M/s.JTC is a partnership firm. They cannot be held to be related. No element of mutuality of interest and flow back of money from M/s.JTC to the appellants is either alleged or evidenced. M/s.JTC are not also held to be interconnected undertaking. Therefore, the situation enumerated in Section 4 (3) (b) of the Central Excise Act, 1944 are not fulfilled. The only fact that M/s.JTC has a temporary office in the premises of the appellants. Some staff members of M/s.JTC are sitting there, by itself cannot be become a valid ground to hold them to be related. 7.1 The original adjudicating authority as well as the appellate authority have completely ignored the submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring 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 interest in the business of each other, the customer company holding shares in the manufacturing company cannot be treated to be a related person . (Emphasis supplied) 7.3 Coming to the issue of over-riding commission paid by the appellants to M/s.JTC, it cannot be by any stretch of imagination leveled to be a flow back of money. Only in case where the appellants have received certain money from their customers influence of such consideration on the price at which the goods are sold can be a thought of. Therefore, we are inclined to accept the contentions of the order-in-appeal in this regard. 8. Coming to the issue of limitation, we find that the appellants have been regularly filing the required declaration under Rule 173C (iii) (a) giving the details of the marketing pattern and interalia mentioning the fact that M/s.JTC have premises at the appellants. Therefore, no suppression of fact can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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