MEENA POLYSACK P. LTD., AMIT Vs. CCE

JUDGEMENT

(1.) ALL these appeals arise out of Order -in -Original dated 28.2.2003 vide which differential duty was confirmed and penalties imposed on all the appellants. Since the issue involved in this case is interconnected, and arising out of the same order -in -original they are being disposed of by a common order.

(2.) THE relevant facts that arise for consideration are that all the appellants are Private Limited companies, and are manufacturing HDPE bags/sacks. All the appellants sold 90% of their production to one M/s. Bardanwala Plastics Ltd. (hereinafter referred as BPL) at a price which was lower than the price at which BPL sold to their customers. On a visit of the Central Excise officers to the premises of the appellants it was noticed that BPL were the owner of the premises where all the 4 appellants were situated and the premises were divided into different parts and given on rent to the appellants. After recording the statements of various persons, the authorities issued show cause notice to all the appellants directing them to show cause as to why BPL should not be considered as related person, and that the price at which final product was sold by BPL should not be considered as the correct assessable value and differential duty be not demanded from all 4 appellants. The appellants resisted the show cause notice on the ground that they are not related to BPL and the price at which they are selling their product to were not depressed due to any relation and also that they sold the same product to independent buyers and price is the same as charged to BPL. The adjudicating authority did not accept the contention of the appellant, and confirmed the differential duty amount on the ground that the 4 appellants were related to BPL, and there was financial accommodation between BPL and the 4 appellants which resulted them being related to each other. Hence, these appeals by the appellants.

(3.) LEARNED Counsel appearing on behalf of the 4 appellants takes us through the entire show cause notice, statements, and the order -in -original. It is his submission that the concept of related person in these cases do not arise as there is no cross share holding of the appellant companies by the BPL or vice versa. It is his submission that the decision of the Hon'ble Supreme Court in the case of Atic Industries Ltd. 1984 (17) ELT 323 (SC), and Alembic Glass Industries Ltd. 2002 (143) ELT 244 (SC) will apply in these cases, and there cannot be any confirmation of demand of differential duty. It was further submitted that, even if it is held that the appellants and BPL are related, the prices charged by the appellant companies to BPL were the same as is charged by the appellants to independent buyers. This would indicate that there was a factory sale and the question of depression of price does not arise, and hence, there cannot be any demand on the appellants.