M/S LMS TOOL ROOM Vs. CCE, RAJKOT

JUDGEMENT

(1.) THIS issue involved in this appeal, filed by M.S. L.M.S. Tool Room, is whether the benefit of exemption under Notification No. 175/86 -CE, dated 1.3.1986 is available to the goods manufactured by them and whether they are related person of M/s. L.M.S. Marketing Pvt. Ltd.

(2.) THE learned Advocate, further, submitted that the expression "LMS" has never been the Brand name or Trade name but an abbreviated form of Late Shri Laxmi Chand Man Sang Shah in whose memory M/s. LMS Foundry Pvt. Ltd. was incorporated and registered as SSI unit; that expression 'LMS' is being used by M/s. LMS Foundry Co. since its inception which is evidence from an advertisement which appeared in the Times of India on 17.5.76 wherein expression 'LMS' was used for advertising the product manufactured by LMS Foundry; that in view of this the benefit of Notification No. 175/86 will be available in respect of goods affixed with expression "LMS". The learned Advocate also mentioned that a demand of Rs. 24,672/ - has been confirmed in respect of Dyes; that the Dyes were not manufactured by them but were sent by the customers for the purpose of carrying on some minor repair like grinding, lapping, etc., and were sent back to the customers; that no duty would be chargeable as there was no change in the name, use, and character of the Dyes after the operation carried by them.

(3.) FINALLY , he submitted that the Appellants were selling their goods on principal to principal basis to LMS Marketing Pvt. Ltd. which was incorporated on 30.1.1979; that marketing company cannot be treated as related person merely on the basis of common Directors, Sale of 100% production, marketing company having paid interest free advance to the Appellants against supply of goods, meeting of expenses towards sales promotion and after sale services and sharing of office expenses. The learned Advocate also mentioned that there was no flow back of profits in the present matter; that there was no suppression of facts as expression 'LMS' was never a Brand name and as such there was no mutuality of interest between marketing company and the Appellants and the facts were not suppressed from the Department.