Customs, Excise and Gold Tribunal - Tamil Nadu
M/S. Beacon Neyrpic Ltd. vs Commr. Of Cex, Madras on 26 March, 2001
Equivalent citations: 2001(133)ELT590(TRI-CHENNAI)
ORDER
Shri S.S. Sekhon (Oral)
1. This appeal has been filed by the manufacture who are a subsidiary company of the buyer company of excisable products who are buying 100% of the goods manufactured, by the subsidiary. The buyer company is holding 60% of the shares of the subsidiary. The remaining 40% holding is by a foreign investment company and others.
2. The appellants have submitted that there is no finding about the mutuality of interest of the subsidiary company in the buyer company, even if it is held that merely becoming a subsidiary company, the buyer company has mutuality of interest in them. They admit that by definition clause, a subsidiary company would be related person, but merely because they are related by definition, if mutuality of interest of the buyer in seller's company and the seller in the buyer's company is not established, ie.e. reciprocatory nature of mutuality is not established, the invocation of the provisions of related persons' sale price to be relevant for Section 4 (1) A is not called for been done by the lower authority. They relied on the Supreme Court decision in the case of UOI Vs. ATIC INDUSTRIES LTD. [1983 (17) ELT 232/SC]; the case of the Division Bench of Bombay High Court in the case of RALLY WOLF LTD. [1992 (59) ELT 220-Bom.], which in turn was relied upon, the decision of Larger Bench of the Tribunal in the case of SAMTEL ELECTRON DEVICES LTD. VS. CCE. MEERUT [2000 (118) ELT 262/L.B.] and also relied on the decision in the case of COLLECTOR OF CENTRAL EXCISE, AURANGABAD VS. KERSONS MNFG. CO. INDIA LTD. [1998 (100) ELT 194-Trib.] where entire production of the assessee was being sold to another company named CROMPTON CO. which held 46.85% of the equity shares of the assessee company.
3. Ld. S.D.R. Shri Sreekumar Menon for the department reiterated the findings of the lower authorities and submits that once they are covered by the definition clause, they would be liable for the consequence thereof and no mutually of intentment can be read, especially when 100% of the goods are sold to the buyer which is admittedly holding 60% of the shares of the assessee in this case.
4. We have considered the submissions and the material and the case laws relied. In view of the case law relied by the Ld. Advocate for the appellants, we find no merits in the Revenue's contentions and the submission of 100% sales being made to 60% stake holder of the assessee company; in the absence of the mutuality of the interest of assessee company being proved in the business of the holding company. In this view of the case law, with which we are bound and respectfully follow, we would find merits in the appellants case and cannot uphold the orders of the lower authorities.
5. In view of our findings, the orders of the lower authorities are set aside and the appellants' appeal allowed with consequential relief, if any, as per law.
(Pronounced & dictated in open court)