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TMI Blog2024 (8) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... case of COMMISSIONER OF CENTRAL EXCISE, SURAT VERSUS BESTA COSMETIC LTD. [ 2005 (3) TMI 130 - SUPREME COURT] where it was held that 'Additionally, before us, a ground was sought to be raised that BHPL bears the entire advertisement cost of the product of the assessee. This was not a ground which was urged on behalf of the Revenue at any stage of the proceedings and we do not permit them to raise it now. This appeal is accordingly dismissed without any order as to costs.' Extended period of limitation - penalties - HELD THAT:- The respondents have not indulged in any suppression, mis-declaration etc. with intent to evade payment of duty; they have been not only filing the Returns but also availing refund/ credit of duty paid in terms of Notification No.56/2002 which was scrutinized by the Revenue from time to time; the respondents would be eligible for refund of duty paid by them and as such, the issue is revenue neutral to themselves; therefore, under the circumstances, extended period cannot be invoked and no penalty can be levied. The appeal filed by the Revenue cannot be sustained both on merits and limitation - there are no reason whatsoever to interfere with the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of M/s Atic Industries 1984 (017) ELT 0323 (SC) is misplaced as the facts are different. 3. Shri Narinder Singh, learned Authorized Representative for the Department, reiterates the grounds of appeal; takes us through the relevant provisions of law and submits that the reliance placed by the impugned order, on the case of M/s Kanchan Industries, is misplaced as the facts are different. He submits that the instant case is covered by the decision of the Tribunal in the case of M/s Sudarshan Castings Pvt. Ltd. 2007 (127) ELT 428. He submits that the cases relied upon by the respondents are not applicable as they cover the period before 01.07.2000 i.e before the new Valuation Rules have come into existence; there is a change in the definition of Related Person under the old Rules and the new Rules. He relies on the following cases: M/s ITEC (P) Ltd. 2002 (145) ELT 280 (SC) M/s J Foundation 2015 (324) ELT 422 (SC) Haldyn Glass Works 2016 (334) ELT A122 Global Yarn Spinners 2007 (214) ELT 401 Goodwill Textiles Pvt. Ltd. 2016 (339) ELT A216 (SC) 4. Shri Prakash Shah, learned Counsel for the respondents, submits that the case of M/s Sudarshan Castings (supra) relied upon heavily by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Chem Allied Ltd. Versus Commr. of C. EX. Cus., Nashik., 2017 (358) E.L.T. 279 (Tri. Mumbai) Commissioner of Central Excise, Nagpur Versus Ramsons Casting Pvt. Ltd., 2017 (357) E.L.T. 431 (Tri. - Mumbai) Commissioner of Central Excise, Ahmedabad Versus Xerographic Ltd., 2010 (257) E.L.T. 11 (S.C.) J.P.P. Mills Pvt. Ltd. Versus Commissioner of Central Excise, Salem., 2016 (46) S.T.R. 317 (Tri. Chennai) Bilag Industries Pvt. Ltd. Versus Commissioner of C. EX., Daman., 2023 (384) E.L.T. 494 (S.C.) Collector of Central Excise, Pune Versus Wander Ltd., 2003 (157) E.L.T. 3 (S.C.) Swiber Offshore Construction P. Ltd. Versus C.C. (Import), Mumbai., 2014 (309) E.L.T. 373 (Tri. Mumbai) Coolade Beverages Ltd. Versus Commissioner of C.EX., Ghaziabad., 2009 (246) E.L.T. 574 (Tri. - Del.) Commissioner of C.EX. Cus., Surat Versus Besta Cosmetics Ltd., 2000 (116) E.L.T. 293 (Tribunal) Commissioner of Central Excise, Surat Versus Besta Cosmetics Ltd., 2005 (183) E.L.T. 132 (S.C.) Nirlon Ltd. Versus Commissioner of Central Excise, Mumbai. 2015 (320) E.L.T. 22 (S.C.) Ganon Dunkerley CO. Ltd. Versus Commissioner (Adj.) of S.T., New Delhi., 2021 (47) G.S.T.L. 35 (Tri. - Del.) 6. Learned Counsel submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub- section (1) of Section 4 of the Act. (v) As regards mentioning of the buyer as related person in the balance sheet by the respondent, the same is in reference to related person within the meaning of section 40(a)(2)(b) of Income Tax Act, 1967 and the definition of other statute cannot be mechanically applied as held by Hon'ble Supreme Court in the case of M/s. Baidyanath Ayurved Bhavan Limited 2009 (12) SCC 149 SC. (vi) The case of M/s. Sudershan Casting Private Limited 2007.127.ELT.428. is not applicable as in that case the parties were held related on the issue of mutuality of interest as well. 9. We find that learned Commissioner has relied on the decision of the Tribunal in the case of M/s Kanchan Industries. Tribunal finds in that case that: 5. ------ It is thus apparent from this definition that the person who is sought to be branded as a related person must be a person who is so associated with the assessee that they have interest directly or indirectly, in the business of each other. It is not enough that the assessee has an interest, direct or indirect, in the business of the person alleged to be a related person nor is it enough that such peson has an interest, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person as given in Section 4(4)(c) of the Act is also not attracted as it is not that a natural relative is purchasing the goods. Meghal Enterprises as a partnership concern and M/s. Kanchan Kitchen Aid P. Ltd. is a company under the companies Act. We thus hold that the Revenue has not succeeded in establishing that M/s. Meghal Enterprises are a related person. To this extent we allow the appeal without going into the aspect of demand being timebarred. As the question of clubbing of the value of clearance has not been pressed before us, the matters are remanded to the jurisdictional Adjudicating Authority to examine as to whether even after clubbing the value of clearance, the manufacturing units would be eligible for exemption as a small scale unit. All other questions such as demand of duty, if any, being timebarred and penalties to be imposed on any of the Appellants are left to be decided by the Adjudicating Authority in accordance with law and after following the principles of natural justice. 10. We find that in the above case, Tribunal has enunciated two principles i.e. (i) it is not important to be merely related; mutuality of interest requires to be established to allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it them to raise it now. This appeal is accordingly dismissed without any order as to costs. 12. We also find that Hon ble Apex Court held in the case of Xerographic Ltd. (supra) held that: 6 . Section 4(4)(c) defines the expression related persons and the said section has to be read in the context of third proviso to Section 4(1)(a). On the reading of the entire section it is clear that three conditions are required to be satisfied before invoking the third proviso. Firstly there should be mutuality of interest; secondly that the alleged related person should be related to the assessee as per definition of Section 4(4)(c) given in the Act and thirdly and importantly that the price charged from the related persons was not the normal price but the price lower than the normal price and because of extra commercial considerations the price charged was less than the normal value. 13. Hon ble Supreme Court held in the case of Bilag Industries Pvt. Ltd. (supra) that: 17. In the present case, undoubtedly AgrEvo SA/Aventis CropScience SA holds the entire shareholding in Aventis CropScience (India) Ltd. (the buyer). It also is a shareholder in BIL. All of the latter s products are sold to Av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in cash by the appellants is available to them in the form of refund. We find that Tribunal Chennai in the case of M/s JPP Mills Pvt. Ltd. (supra) held that: 12. However, we are also of the view that this service is an input service as defined under Rule 2(k) of the Cenvat Credit Rules, 2004 because the service is in relation to sales promotion which is specifically included in the inclusive part of the definition. That being the case, the appellants were eligible to take credit of the Service Tax so payable if the appellants were to pay excise duty on any of the export goods. Though there were conflicting decisions in this issue by the Hon ble Gujarat High Court in the case of CCE v. Cadilla Health Care - 2013 (30) S.T.R. 3 (Guj.) and by Hon ble Punjab and Haryana High Court in CCE v. Ambika Overseas - 2012 (25) S.T.R. 348 (P H), now it stands accepted by C.B.E. C. in their circular 943/4/2011-CX dated 29-4-2011 at item 5 that Cenvat credit can be taken on such services. On textile products a voluntary scheme for payment of excise duty was in force. So the appellants could pay duty, take credit and utilize it either for local clearance or on any export consignment and get rebate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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