Full Judgment
Larsen & Turbo Ltd. sole distributor for appellants goods, in the assessable value of clearance mode for captive consumption and to M/s. Larsen & Turbo Ltd. in their factory. In the present case it is a matter of fact that the appellants were subsidiary company of their sole distributor i.e. M/s. Larsen & Turbo Ltd. Until 17/5/1993, as per the Chartered Accountants certificate from 18/05/1993 onwards, they ceased to be subsidiary company of M/s.
Larsen & Turbo Ltd. And as such during the period of dispute they were not related person for the purpose of the Central Excise Act, 1944. It is also not the case of the department as the show cause notice did not claim that the sales to M/s. Larsen & Turbo Ltd. for their own consumption were to a related person. As per show cause notice, M/s. Larsen & Turbo Ltd. an Associate Company of the appellants but there is no flow back due to the transactions entered in between them. There is no allegation of recovery of additional amount from M/s. Larsen & Turbo Ltd. and there after relying upon the decision of this tribunal in the case of Xerographers Ltd. v. CCE allowed the appeals against the order of the lower authority and setting aside that order.
2. Revenue is aggrieved, on the grounds, that the findings of the Commissioner (Appeals) to the fact that there is no flow back in the transaction interse between Larsen & Turbo Ltd. And the assessee and there is no allegation of recovery of additional consideration and reliance or Tribunal decision regarding related persons was not relevant and not applicable, Since Comparable price for same goods at the factory gate were available and the assessee captively consumed the Electrode and M/s. Larsen & Turbo has consumed the Electrode in their manufacture then such Electrode captively consumed by the assessee and M/s. Larsen & Turbo Ltd. & not sold to their customers is by including 2% service charges by applying the Rule 6(b)(i) of Valuation Rules 1975, thus 2% should be added.
3. We find that when there is no charge collected of such 2%, for the Electrodes captively consumed by M/s. Larsen & Turbo and or the assessee then such charge cannot be added, moreover the class of buyers for electrodes consumed by M/s. Larsen & Turbo Ltd and electrodes sold in the capacity as distributor /dealer would be different & can have different prices under the erstwhile section to Valuation. We find no merits in the appeal filed by Revenue to upset the order of ld.Commissioner.