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TMI Blog2004 (4) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Marico Industries Limited and Godrej Hi-Care Limited. The order passed by the Respondent in the case of Marico Industries Limited was set aside by this Tribunal. (b) The present appeal relates to the goods sold to Godrej Hi-Care Limited. The assessment of the Appellants from the period 1976 are provisional to the knowledge of the department. As seen from the copy of RT 12 return for the months of January - March, 1998 enclosed. (c) Prior to July, 1997, the said Godrej Hi-Care Limited, who is, inter alia, engaged in the manufacture of Mosquito repellant mats under the brand name of "GoodKnight", was a subsidiary of the Appellants. The said Godrej Hi-Care Limited ceased to be a subsidiary of the Appellants with effect from July 7, 1997. They were desirous of giving the said 'Cinthol Ultimate' of 50 grams as complimentary along with their product "GoodKnight". They accordingly placed orders for supply of 'Cinthol Ultimate' with a declaration on the wrapper "Cinthol Ultimate Free with GoodKnight 30 Mats". (d) The Appellants filed a Price Declaration under Rule 173C of the Rules. (e) The Department was of the view that the said M/s. Godrej Hi-Care Limited is related to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) of the Act and such price is "normal price" in the course of wholesale trade. It was further alleged that since the normal price for sale of identical goods to other buyers is available, the Department is bound to accept such price as normal price in the course of wholesale trade in terms of Section 4(1)(a) of the Act. It was further alleged that the purchase order for sale of the products at a reduced assessable value is only for Godrej Hi-Care Limited which establishes the nexus between the seller and the buyers, which is the subsidiary company of the Appellants and that the Appellants and the Godrej Hi-care Limited have mutuality of interest in each others business and they have some advantage, commitment, influence, investment, portion, right, share or stake which is commonly shared or interchangeably reciprocated between them as they are affiliated, allied or grouped in a particular bond. It was further alleged that the value of the said goods shown in the purchase order is a special price and not normal price. The show cause notice sought to take the price of Rs. 1332.24 as the assessable value by taking the highest price at which the said goods were sold to the wholesale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or indirectly in the business of each other. The equality and degree of interest which each has in the business of the other may be different; the interest of one in the business of the other may be direct while the interest of the latter in the former may be indirect, but that would not make any difference so long as each has got some interest direct or indirect in the business of the other ... In the absence of mutuality of interest in the business of each other, the customer company holding shares in the manufacturing company cannot be treated to be a related person." (b) However, recently the two member Bench of the Supreme Court in the case of Flash Laboratories Ltd. v. C.C.E. 2003 (151) E.L.T. 241 (S.C.) has but in the context of earlier Section (4), held that indirect relationship between two companies, would also be sufficient to establish mutuality. In this case, the question that arose was in respect of valuation of toothpaste, manufactured by that Appellant. The same was being sold to their holding company (PPL) which was a subsidiary of PBL. The Department contended that that PPL and PBL were related persons of the Appellant and were purchasing goods at lower prices an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of goods in India by them, from whom the Respondent had imported the goods, was insufficient to establish mutuality of interest or that they were related persons. The Apex Court referred to the decisions in Atic Industries supra, as also that in Maruti Udyog, and dismissed the appeal of the department. In the case of UOI v. Kaira District Co-op. Milk Producers Union Ltd., 2002 (146) E.L.T. 502 (S.C.), the Supreme Court dismissed the appeal and saw no reason to interfere with the High Court's view held that the buyer and the respondent in that case were not related persons relying upon the judgment in Atic Industries supra. The Supreme Court held that there must be direct or indirect interest in the business of each other between the buyer and manufacturer. There that being absent, and in the instant case, merely the buyer purchases milk from the Respondent, would not be sufficient in law to call both of them related person. It was observed in para 4 of the judgment that if there is a shareholder, then the shareholder may have an interest in the company, but merely because some products were being sold to the shareholder by the company, that would not make them related person ..... X X X X Extracts X X X X X X X X Extracts X X X X
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