Case: Calcutta Chromotype Limited Vs. Collector of Central Excise, Calcutta

2. The appellant manufactures playing cards. It sells the entire stock of playing cards manufactured by it to its sole distributor M/s. Ganga Saran & Sons Pvt. Ltd. The Assistant Collector, Central Excise under the Act levied duty at the price at which the playing cards were sold by M/s. Ganga Saran & Sons Pvt. Ltd. as according to the Assistant Collector it was a related person within the meaning of Section 4(4)(c) of the Act of the appellant. Collector of Appeals confirmed the order of the Assistant Collector also holding that M/s. Ganga Saran & Sons Pvt. Ltd. was the related person of the appellant. Against the order of the Collector the appellant filed a revision application under Section 36 of the Act, prior to its amendment, and thereafter the revision application was transferred to the Appellate Tribunal and heard as appeal

Reasoning: 5. In the present case, we do find that the authorities and the Appellate Tribunal did address themselves to the basic question as to the shareholdings of both the assessee and the buyer, inasmuch as they found that the Managing Director of both the companies was the same and one more Director was common. It was also found that the shares of both the companies were held by the members of the Sharma family but that is quite a vague expression and, therefore, in our view, the Appellate Tribunal was partly right in giving the direction to ascertain the break-up of the shares of each member of the family in the two companies. To lift the veil the actual shareholding of both the companies and the persons in control of the management of both the companies needed to be ascertained to consider the identity of interest of both the companies in the business of each other. No presumption of such mutuality of interest in the business of each other could have been drawn without the factualHowever, in the present case, we are told that for subsequent years, the authorities have not treated M/s. Ganga Saran & Sons Pvt. Ltd., the sole distributor of the appellant, as a related person which fact has not been controverted by the respondent and have accepted the price at which the goods are sold by the assessee to the sole distributor as the sole consideration for sale. The matter pertains to the year 1976. Order of the Assistant Collector is of the year 1978. We do not think at this late stage any purpose will be served to inquire into the shareholdings of the assessee, the appellant and its sole distributor as directed by the Appellate Tribunal. We are, therefore, inclined to hold that no effect be given to the judgment of the Appellate Tribunal