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TMI Blog2008 (2) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... Column S.No. Appeal No. Appellant Respondent O/O &O/A Duty/Penalty Remarks 1 E/716/05 M/s HykonElectronic Systems CCE, Calicut 02/2005 dt. 29.04.05 Rs.4,90,674/- Duty Rs.4,90,674/Penalty 2 E/717/05 M/s HykonPower Electronic(P) Ltd. CCE, Calicut 02/2005 dt. 29.04.05 Rs.4,31,243/- Duty Rs.4,31,243/Penalty 3 E/718/05 M/s Christo George CCE, Calicut 02/2005 dt. 29.04.05 Rs.10,000/- Penalty 4 E/719/05 M/s CatherineChristo CCE, Calicut 02/2005 dt. 29.04.05 Rs.5000/- Penalty 5 E/720/05 Smt K.K. Rosy CCE, Calicut 02/2005 dt. 29.04.05 Rs.2500/- Penalty 2. In this case, there are actually two manufacturing units and another firm HMSPL which is a Marketing Firm. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MSPL which is a marketing firm. The learned Commissioner comes to the conclusion that the sales of these two units to the marketing firm are not at arms length and the manufacturing units and distributing marketing firm have interest directly or indirectly in the business of each other. Therefore, he has held that the value to be adopted is the sale price of the goods sold by the marketing firm. The learned JDR reiterated the findings of the Commissioner. For clarity we reproduced the following findings of the Commissioner in Para 33 of the Order-in-Original. "I find that Shri Christo George, the Managing Director of M/s HMSPL is having the overall control over the affairs of the distributing/marketing firm. He himself is the Managing Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no under valuation in purchase. He also brought to our notice that the total purchase of HMSPL from HES and HPE for the year 1998,1999 and 1999-2000 is Rs 34,48,067/- and Rs 1,04,52,719/- and Rs 44,57,790/- and Rs 62,24,839/- respectively. Whereas the total purchase from others for the said two years is Rs 35,40,242/- and Rs 59,66,648/-. Moreover, HES and HPE have also sold to other parties during the above two years for the amounts totaling to Rs 10,06,593/- and Rs 9,19,396/-. Therefore, he urged that there is no basis to sustain the finding of the Commissioner. 6. The Commissioner has stated that prior to the period 1.7.2000, the two manufacturing firms and the marketing firm should be treated as related persons and therefore he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sells the goods and the price at which the manufacturing firm sells the goods to the marketing firm due to over heads and additional costs such as transportation, loading/unloading etc. Many post-manufacturing expenses are also involved. Unless it is shown that the price at which the goods have been sold to the marketing firm have been influenced by the relationship between the marketing firm and the manufacturing firms, there is no basis for adopting the valuation of the marketing firm. In such circumstances, we do not find any merit in the impugned order. The duty demand cannot be sustained. Therefore, we set aside the impugned order. Since the duty demand cannot be sustained, the penalties levied also cannot be upheld. Hence, we allow al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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