9911796707
TMI Blog2019 (9) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... Chartered Accountants of India, is not equal to the definition of related person under Section 4(3)(b) of the Central Excise Act - Admittedly, in the facts of these appeals, the appellant is a Private Limited company whereas the said M/s P. K. Industries is a partnership firm and thus they are not interconnected undertakings. Another coordinate Bench of this Tribunal in M/S. PHILIPS ELECTRONIC INDIA LTD. AND PHILIPS ELECTRONICS NY. THE NETHERLANDS VERSUS CCE-CHANDIGARH [ 2015 (11) TMI 1161 - CESTAT NEW DELHI] under the fact that 97-98% of the goods were sold to related person and balance 2-3% to independent buyer, there being no allegation that independent buyer is also a related person and the transaction value of independent buyer wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncern of appellant and registered excise dealer). Thus, it appeared to Revenue that appellant is required to pay Central Excise duty on the value at which the related person sold the goods to unrelated person, as provided in Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, which provides When the assessee so arranges that the excisable goods are not sold by it except to or through a person who is related in the manner specified in either of sub-clause (ii), (iii) or (iv) of clause (b) of sub-section (3) of Section 4 of the Act, the value of goods shall be the normal transaction value at which these goods are sold by the related person at the time of removal, to buyers (not being related perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 11A(i) and (iv) of Central Excise Act. 4. A follow up show cause notice dated 25.01.2016 for the subsequent period January, 2015 to December, 2015 was issued on the same grounds demanding duty of ₹ 6,16,803/-. 5. Both the show cause notices were disposed of vide common order-in-original dated 02.03.2017 by the Joint Commissioner, on contest, confirming an amount of ₹ 22,37,401/- for the period December, 2013 to December, 2014 dropping the demand for the period June, 2010 to November, 2013. Further, in respect of subsequent show cause notice the proposed demand of ₹ 6,16,803/- was confirmed. Penalty under Section 11A was imposed in respect of both the demands alongwith interest. 6. Being aggrieved, the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different legal entity than that of M/s P. K. Industries. Merely by showing a firm as a related person in their balance sheet, the said firm does not become a related person as far as the provisions of Section 4 of the Central Excise Act, 1944 is concerned. For the purpose of Section 4 ibid, for declaring any firm as a related person , there should be some financial flow back. In absence of any proof of financial flow back, one firm cannot held to be a related person , of another. Merely by showing the firm as a related person in the balance sheet of the appellant company, it cannot be said that there is mutuality of interest, so as to bring them within the fold of clause (iv) of Sub-section 3(b) of Section 4 of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the impugned order. 11. Having considered the rival contentions, we find that the Court below have ignored the fact that there are also sales to unrelated parties at same prices or even lower price, as compared to the transaction value for clearance to M/s P. K. Industries. Further, classification of M/s P. K. Industries as related person of the appellant as per Accounting Standard AS(18) issued by the Institute of Chartered Accountants of India, is not equal to the definition of related person under Section 4(3)(b) of the Central Excise Act. Under Central Excise Act person shall be deemed to be related it; i) they are inter-connected undertakings; ii) they are relatives; iii) amongst them the buyer is a relative and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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