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TMI Blog2005 (3) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... tries, price list was circulated on the letter head of Kanchan Industries and the entire responsibilities of advertisement and publicity rested with Meghal Enterprises. These grounds do not satisfy the first part of the definition of related person as given in Section 4(4)(c) of the Central Excise Act, that is, all these factors do not establish that they have interest, directly or indirectly, in the business of each other. Sale of entire production by a manufacturing unit is not sufficient to prove that the purchaser is a related person as found by the Tribunal in the case of Lakme Ltd., supra. All the factors mentioned in the impugned order for treating M/s. Meghal Enterprises as a related person are nothing but business transaction as Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E S.S. KANG, VICE-PRESIDENT AND V.K. AGRAWAL, MEMBER (T) For the Appellant : B.L. Narasimhan, Adv. For the Respondent : C. Baranwal, SDR Order V.K. Agrawal, Member (T) 1. In these appeals, arising out of a common Order-in-Original No. 72/91 dated 8-8-1991 the issue involved are whether the value of clearances of excisable goods of M/s. Kanchan Industries, M/s. Neha Industries and M/s. Kanchan Kitchen Aid Pvt. Ltd. are to be clubbed together for the purpose of Notification No. 175/86-C.E., dated 1-3-1986, whether M/s. Meghal Enterprises are the related persons in terms of erstwhile Section 4 of the Central Excise Act, whether penalties are imposable on all the Appellants and whether extended period of limitation is invocable for demanding Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold to a company, that the manufacturer was not related to the company which was not shown to have any interest in the business of the manufacturer. The learned Advocate also relied upon the decision in the case of Kwality Ice Cream Co. v. CCE, 2002 (145) E.L.T. 584. 3. He also contended that the finding in the impugned Order that the entire responsibility of advertisement and publicity rested with M/s. Meghal Enterprises and its distributors and therefore, their dealing were not from principal to principal is not correct and is based on assumption and is against the law enunciated by the Supreme Court in the case of Moped India Ltd. v. Assistant Collector, 1986 (23) E.L.T. 8 (S.C.) wherein it has been held that because the after sale serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghal Enterprises are related person of the assessees; that Meghal Enterprises are working from the same premises wherein Kanchan Industries are functioning; that Meghal Enterprises were looking after the advertisement all over India, they were attending to the after sale services during the warranty period and giving finance to the manufacturing companies, that Mrs. Jaya Ashok Khimavat is one of the partner in Meghal Enterprises and her husband Shri Ashok C. Khimavat is partner/or proprietor/director in the manufacturing units. She, further, submitted that the dealings were not as principal to principal and were not at arms length as the manufacturing company had not sold their goods to any other party, except a few instances in May, 1987 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, a subsidiary company, a relative distributor of the assessee and any sub-distributor of such distributor. 6. 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, direct or indirect, in the business of the assessee. In the case of UOI . v. Atic Industries Ltd., 1984 (17) E.L.T. 323 (S.C.), the Supreme Court has held that each of them must have direct or indirect intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isement is includible in the assessable value of the goods. But that is not the issue involved here. The fact that the goods are known in the market as those of Kanchan Industries does not establish the mutuality of interest. This is a normal business phenomenon. When a dealer of Maruti Udyog Ltd. sells motor vehicles of Maruti Udyog, these vehicles are known as Maruti vehicles and not the vehicles of dealers. Mutuality of interest cannot be established by merely showing that they have business dealings between them. Normal commercial terms in agreement between the manufacturer and buyer do not constitute mutuality of interest between them. The second part of the definition of related person as given in Section 4(4)(c) of the Act is also no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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