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TMI Blog2008 (2) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Rules, 2002. One of the captioned appeals (E/336/04) is filed by M/s. Anantha Poly Products Private Ltd. (APPPL) against the demand of duty, interest and penalty imposed on it. The Appeal No. E/337/04 is against the penalty imposed on Shri A. Sundaralingam, Managing Director of M/s. APPPL. The demand relates to the clearances of plastic moulded furniture to M/s. Polyset Plastic Pvt. Ltd. (PPPL) during the period November 2000 to July 2002. The differential duty is demanded with reference to the sale price of PPPL of the impugned goods on the ground that APPPL and PPPL are related persons for the purpose of Section 4 of the Central Excise Act, 1944. 2. In the impugned order, the Commissioner (Appeals) con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urer shall be mutuality agreed upon between the parties from time to time. (x) All know-how and other information regarding manufacture, supplied by the purchaser, shall not be disclosed to any other third party ever after the termination of the agreement. 3. The Commissioner found that PPPL supplied machinery valued Rs. 1.9 crores on lease basis to the appellant against a meager consideration of Rs. 4.54 per chair. PPPL had the right to change the design as and when desired. Raw materials were acquired on the advice and guidance of PPPL who also dictated the price of the goods. The brand was owned by PPPL. The appellant had no right to sell the goods to any third party. The technical know-how was provided by PPPL. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la. We find that this observation is also incorrect. The Commissioner found that the sale price of the impugned goods was dictated by PPPL. This is also an incorrect finding. The price is arrived at after consultation and negotiations between the parties as per the agreement. There is no finding of flow back of funds from PPPL to APPPL. The facts of the case do not justify a conclusion of mutuality of interest between the appellant and its buyer. In the circumstances, the impugned demand adopting the sale price of the buyer treating it as related to the manufacturer is not legally sustainable. We also find that no attempt was made to ascertain the prices of comparable goods to find out if the sale price was depressed to ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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