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TMI Blog2002 (4) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Used in the rail jointing work by I.T.C.L. on contract basis - 80% of the production 2.2 He, further, mentioned that the demand of Central Excise duty has been confirmed for the period from January, 1994 to 12-9-1996 and penalties have been imposed by the Adjudicating Authority on the ground that the price at which the Thermit portion and dry moulds were sold by them to Railways was much higher than the price adopted for the goods cleared for self use and the highest price paid by the Railways on sale of Thermit portion and dry moulds nearest to the date of each clearance for self use should be adopted for determining the assessable value; that the Department had taken the invoice price of Thermit portion cleared for sale to the Railways and the invoice price for self use on day to day basis; that most of the comparative figures are for the small quantity sold at higher price; that if the highest of the price for bulk sale to Railways is taken as comparative price, no differential duty will be payable by them at all; that, further, they had incurred freight of Rs. 50/- per Thermit portion and if this transport charge is reduced from the price charged by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel mentioned that he is not pressing the appeal. However, for the purpose of time limit he would like to mention that they had filed declarations under Rule 173B of the Central Excise Rules under the same Heading for which they got the approval under the earlier procedure; that they had declared Heading 84.79 for Thermit Welding of equipment which was approved by the competent authority during the period from 25-12-87 to 23-7-96 that as such there was no default on their part and their was no intention of suppressing any information for any reason; that dry moulds were classified by them under Heading 84.79 whereas the Department had classified them under Chapter 68 of the Schedule to the Central Excise Tariff Act; that the sand from which the dry mould is manufactured cannot fall under any of the description given in Heading 68.07 that is "Stones, Plastic, Cement, Asbestos, Mica or similar materials not else where specified or included"; that there is a specific description "Moulds for Metal" under Heading 84.80 and as the dry moulds are used for molten metal, these are covered under Heading 84.80. 5.Finally, the learned Counsel submitted that the demand is time barred as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... box and mould shoe are classifiable under sub-heading 7326.90 of Central Excise Tariff. The learned Counsel, further, submitted that the Supreme Court has held in Calcutta Chromotype Ltd. v. C.C.E. - 1998 (99) E.L.T. 202 (S.C.) that the transaction price will not be the normal price for the purpose of valuation if the buyer is a related person and the price is not the sole consideration for sale; that both conditions must co-exist so that the price at which the manufactured goods are sold by the assessee to the buyer is taken as the value for the purpose of assessment of duty of excise; that even if A.T.L. and I.T.C.L. are related persons, there is no material evidence that the transaction between them was not at arm's length; that the dry moulds manufactured by A.T.L. were always supplied to I.T.C.L. in naked condition as no packing material was used; that A.T.L. has entered into a contract for selling dry moulds at Rs. 24.60 per pair and the same had been charged from I.T.C.L.; that in letter dated 22-1-96, M/s. I.T.C.L. had explained the breakup of Rs. 50/- being charged by them for dry moulds per pair according to which it included cost of bought out packing, freight inward/ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to evade duty and as such extended time limit is invocable. The learned SDR also relied upon the decision of the Larger Bench of the Tribunal in the case of Saurashtra Chemicals v. Collector of Customs, 1986 (23) E.L.T. 283 (T) - wherein it was held that carbon rings and carbon seals for use as spare parts in turbo sets and compressors were classifiable under Heading 68.01 and not under Heading 84.65 of the Customs Tariff Act. 8.In respect of Appeals filed by M/s. A.T.L. Others, the learned SDR submitted that A.T.L. is the subsidiary Company of I.T.C.L. which owns 98% of the shares of A.T.L.; that goods manufactured by A.T.L. enter the stream of trade for the first time when these goods were sold by I.T.C.L. to Railways; that A.T.L. had not to face marketing problem and equally I.T.C.L. thrusted the responsibility on A.T.L. to arrange bulk supplies of dry moulds. He, further, submitted that though there was a condition in purchase order for charging loading and unloading charges at 15 paise per carton which was never charged; that A.T.L. had been making payment on regular basis to the contractors; that A.T.L. had also been paying loading and unloading charges in respect of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts that goods were liable for confiscation; that there should be a proposal for confiscation of goods in the show cause notice; that as they had complied with the direction of the Department, there cannot be any penalty imposable on them. 10.We have considered the submissions of both the sides. As far as classification of various goods is concerned, the learned Counsel for the Appellants has mentioned that the Appellants are not pressing the appeals in this regard except in the case of moulds and on the question of demand being time barred. Accordingly the classification of the products except dry mould is upheld, being not contested. Revenue has classified the moulds under Heading 68.07 claimed the classification under 84.79 or alternatively under 84.80 of the Tariff. We agree with the learned Advocate that the moulds are classifiable under Heading No. 84.80 as this Heading applies to moulding patterns, moulds for metal (other than ingot moulds), metal carbides, glass, mineral materials, rubber or plastics. As per Explanatory Notes of H.S.N., Heading 84.80 covers all moulds (whether or not hinged, and whether used by hand or in process or moulding machines) which are of a kind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the assessee to make a clear mention of the substance of raw material, applies in our view, more to the Departmental officers who are required to approve the classification lists after examining and verifying the same. It is imperative on their part, in such a situation, to enquire about substance/material out of which the product is made and other further details. 12.The last issue to be decided is whether M/s. I.T.C.L. and A.T.L. are related persons. The various reasons advanced by the Adjudicating Authority in the impugned order to held that there is mutuality of interest between the two companies are not sufficient to hold the same. It is settled law that a buyer would not become a related person merely because all the goods are sold to a particular person unless the price charged to them is based on extra commercial consideration. Further merely because a company is a subsidiary company, this fact would not make it a related person unless it is established that each has interest in the business of other. Further the learned Advocate showed that the price at which A.T.L. were selling the moulds to Railways, the same price has been charged by them from I.T.C.L., ..... X X X X Extracts X X X X X X X X Extracts X X X X
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