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TMI Blog2005 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. It shall be open to the assessee to advance all arguments available to them in their defense." 1.3 The Commissioner, after considering the material, especially the share holding of Shri N.D. Shetty, the Managing Director and Director Shri J.A. Mehta in the assessee-Company Haldyn and the said buyers were J. Group a partnership of family of Shri J.A. Mehta, even though J.A. Mehta was not a partner at any time in the J. Group and M/s. Tarvin Trading & Investment Pvt. Ltd. the other buyer shares were held by Shri N.D. Shetty and therefore they were 'Related Persons', and in view of this fact of declaration filed in Part II for the 'favoured buyers', he concluded - "47. In view of the foregoing discussions conclusion comes that M/s. Tarvin Trading and 'J' Group of Concerns were related person and favoured buyer of M/s. Haldyn Glass Ltd., Central Excise duty was not paid on sale price of those related persons; assessable value can be decided by adding 20% to 25% profit margin of those concerns to assessable value declared by M/s. Haldyn Glass Ltd., in respect of those goods, there was suppression of facts and proviso to Section 11A can be invoked; M/s. Haldyn Glass Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the said goods to M/s. Janta Glass Works, M/s. 'J' Traders & M/s. 'J' Foundation were on lower side compared to prices for sale of like goods to other like customers. S.C.N. No. V-(70) Cell-18/89, dated 7-2-89 was therefore, issued inter alia requiring the assessee to show cause as to why the declared assessable. Values in case of the said 'J' group of concerns should not be revised and why differential duty should not be recovered. 2.2 The assessee in reply to the said SCN contended inter alia that the said 'J' group of concerns were their regular customers purchasing large quantities of goods and that, therefore, somewhat lesser prices were charged from the said customers. 2.4 Collector of C. Ex., Bombay-II in exercise of powers conferred under Section 35 of CESA, 1944 reviewed the Order-in-Original, dated 25-4-89 and vide Review order dated 24-4-90 directed for filing appeal against the said O-in-O. The Collector also observed that mutuality of interest between the assessee and the said 'J' Group of Concerns was not considered by the Asstt. Collr. while passing the said O-in-O. The appeal was, accordingly filed before Collector (Appeals), Bombay. 2.5 Collector of C. Ex. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count has to be explicitly indicated in the price list and has to be approved by the Dept. Secondly it has also to be part of the contract. This does not seem to be the case discounts cannot be implied as presumed and he set aside the order and ordered that during the fresh proceedings the point raised by the Collr. about the native of relationship between Respondents and J. Group may also be duly looked into by the Asstt. Collr." In this view of the facts on record, there is force in the plea and ground taken that the proceedings now initiated by SCN dated 4-2-93, by merely recording these facts of the parallel proceedings will not call for upholding the notice. The Price Lists filed are required to be finalised pursuant to the CCE (Appeals) remand orders. The assessee has travelled to the Tribunal against the order of remand and that matter is pending in Appeal No. E/2060/91. Therefore approving the reliance of the appellants on the case of UOI v. Godrej & Bayer Mfg. Co. (P) Ltd. Petition No. 12824 of 1989 in SC and ITC Ltd. [2004 (170) E.L.T. 33], the present show cause notice has to be held to be bad ab initio and is required to be struck down. 2.2 Appellant strongly urged a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even in respect of said sales in proforma II was never the dispute on record in the proceedings before the Assistant Commissioner. Therefore even the remand direction is beyond the dispute before the Commissioner (Appeals). 2.4 The order impugned before us has calculated the assessable value in a manner not permissible in law in the case of "related person". The notice demands duty on total sales value (As per Balance Sheet) of alleged "related person". The demand was required to be made after permitting required deduction especially duty already paid. Assessee's plea on this ground is to be accepted. 2.5 Examining the issue on merits of the demands made, by considering the buyers in this case to be "Related person and favoured buyer" we find no concept of favoured buyer in Section 4 of the Central Excise Act, 1944 or the Valuation Rules framed thereunder. The concept of "related person" is however to be found therein. Further it is found - (a) The "Related Person" concept brought in this case by the fact of the relatives of a Director who are partner/s of the buyer-firm. This is directly in violation of the law as laid down by the Supreme Court in case of UOI v. Kantilal Chunil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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