Customs, Excise and Gold Tribunal - Tamil Nadu
Bombay Tyre Treads vs Addl. Commissioner Of Central Excise on 7 January, 1998
Equivalent citations: 1998(59)ECC461
ORDER
J.H. Joglekar, Member
1. The appellants in this case filed the price lists in Part-I which were duly approved. Later, the department found that the entire production was sold to two other firms who were selling the goods at a higher price to their customers. The two buyers' firms and the assessee's firm had some partners in common. Based on these facts, the Show Cause Notice was issued seeking differential duty calculated on the basis of prices charged by the allegedly related firms. After hearing the assessees, the adjudicating authority confirmed the duty and also imposed the penalty on the assessees but did not impose any penalty on the buyers. The present appeal arises out of this order.
2. We have heard Shri G. Sampath, Ld. advocate for the appellants and Shri S. Murugandy for the Revenue.
3. The show cause notice alleges suppression on the part of the appellants to sustain the extended period. The Ld. advocate had advanced the plea that there were no suppression and has contested the finding that the buyers were related persons of the assessees. We find that the ratio of the tribunal judgment in the case of Shiva Tobacco Co. v. CCE, New Delhi reported in 1996 (87) ELT 177 applies to the facts of the case. In the cited case, the entire production of the appellant company was sold to a single firm. Both the buyers and sellers had partners who were related to each other and for some time there were common partners also. The tribunal observed that in the absence of an establishment as to the mutuality of interest of the buyers and the sellers, it could not be established that the buyer was related to the seller. It was held that the partnership firms had personalities distinct from the partners of the firm. It was held that the transactions between the buyer and seller were on principal to principal basis. It was held that the department had failed to establish the relationship between the buyer and the seller. In the present case also, we find that the adjudicating authority has relied heavily on the observation that the partners were related to each other. No other factum as to relationship has even been indicated.
4. As regards-flow back the adjudicating authority has dismissed the thought saying that there was no need to prove the flow back whether the partners of the buyers and sellers were related to each other. We find that this logic of the adjudicating authority does not sustain. Since no evidence is on record to establish the mutuality of interest between the buyers and sellers, it cannot be held that the basis of valuation as declared by the assessees was wrong.
5. In the result, the appeal succeeds. Impugned order is set aside. Appropriate relief to the extent warranted is ordered.
Pronounced and dictated in the open court.