M/s. Countech Systems Poonam and A. Bhattacharya (Partners) , M/s. Glory Hi-tech and Sudhir Dingra Director Versus CC, Faridabad
Valuation - related person u/s 4 (4) (c) of Central Excise Act, 1944 - assessable value - extended period of limitation - demand of duty with interest - imposition of penalty - constitution of firm referred - Held that: - constitutions of the firms states that the appellant M/s.Glory Hitech is company and M/s.Countech Systems is partnership firm and the trading company is also private limited company. From the constitution, it is clear that the appellants and the trading company are not related to each other in terms 4 (4) (c) of Central Excise Act, 1944.
The decision in the case of Reliance Industries Products vs. CCE [2011 (3) TMI 704 - CESTAT, MUMBAI] relied upon where it was held that The three conditions are to be satisfied before it can be inferred the existing relationship namely, (i) there should be mutuality of interest, (ii) alleged related person should be related to the assessee as per Section 4(4)(e) even in the Act and (iii) importantly the price charged from the related person was not the normal price but a price lower than the normal price and because of extra commercial consideration, the price charged was less than the normal value - the appellants are not related persons in terms 4 (4) (c) of Central Excise Act, 1944
Certain advances given by trading company to the appellants - Held that: - it is routine practice in the business that buyers of the goods give certain advances to the suppliers, therefore, it cannot be said that by giving mere advances to the suppliers are having interest in the business of others.
Appellants have sold the goods to the trading company at lower price and the trading company has sold the goods on a higher price - Held that: - the appellants are selling the goods to the trading company at a agreed price and no additional benefit has been provided by the appellants to trading company. On the other hand while the goods were sold by the trading company to various banks, the additional benefits were given on the goods such as warranty, installation, commissioning, testing, after sale services, maintenance, etc. The price charged by the trading company includes these services charges, their profit and cost alongwith machines, in that circumstance, it cannot be said that the price of trading company is the influenced price of the goods sold by the appellant.
Appellant and trading company not related to each other - demand not sustainable - appeal allowed - decided in favor of appellant.
Article referred: Tax Management India.com
Valuation - related person u/s 4 (4) (c) of Central Excise Act, 1944 - assessable value - extended period of limitation - demand of duty with interest - imposition of penalty - constitution of firm referred - Held that: - constitutions of the firms states that the appellant M/s.Glory Hitech is company and M/s.Countech Systems is partnership firm and the trading company is also private limited company. From the constitution, it is clear that the appellants and the trading company are not related to each other in terms 4 (4) (c) of Central Excise Act, 1944.
The decision in the case of Reliance Industries Products vs. CCE [2011 (3) TMI 704 - CESTAT, MUMBAI] relied upon where it was held that The three conditions are to be satisfied before it can be inferred the existing relationship namely, (i) there should be mutuality of interest, (ii) alleged related person should be related to the assessee as per Section 4(4)(e) even in the Act and (iii) importantly the price charged from the related person was not the normal price but a price lower than the normal price and because of extra commercial consideration, the price charged was less than the normal value - the appellants are not related persons in terms 4 (4) (c) of Central Excise Act, 1944
Certain advances given by trading company to the appellants - Held that: - it is routine practice in the business that buyers of the goods give certain advances to the suppliers, therefore, it cannot be said that by giving mere advances to the suppliers are having interest in the business of others.
Appellants have sold the goods to the trading company at lower price and the trading company has sold the goods on a higher price - Held that: - the appellants are selling the goods to the trading company at a agreed price and no additional benefit has been provided by the appellants to trading company. On the other hand while the goods were sold by the trading company to various banks, the additional benefits were given on the goods such as warranty, installation, commissioning, testing, after sale services, maintenance, etc. The price charged by the trading company includes these services charges, their profit and cost alongwith machines, in that circumstance, it cannot be said that the price of trading company is the influenced price of the goods sold by the appellant.
Appellant and trading company not related to each other - demand not sustainable - appeal allowed - decided in favor of appellant.
Article referred: Tax Management India.com
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