IMPORTANT POINT
Flash Laboratories Ltd. has mutuality of interest with its holding Company Parle Products Ltd. and later had mutual interest in its holding Co. Parley Biscuits Ltd. and hence Tribunal has rightly held that they are related persons under Section 4(4)(c) of Central Excise Act, 1944 for levy of Excise duty.

JUDGMENT

K.G. Balakrishnan, J.-Both these appeals are filed by Messrs. Flash Laboratories Limited, a company engaged in the manufacture of tooth paste ("Prudent"), falling under chapter Heading 3306.00 of the schedule to the Central Excise Tariff Act, 1985. The appellant has been selling its products to their holding company, Messrs. Parle Products Limited, which is a subsidiary company of Messrs. Parle Biscuits Limited. The appellant was found paying duty at the price at which the goods were being sold to the holding company, namely, Parle Products Limited. A show cause notice was issued to the appellant company alleging that Messrs. Parle Products Limited and Messrs. Parle Biscuits Limited were "related persons" and were purchasing goods at lower prices and selling the same at higher prices and that the appellant had not filed the price list in Part IV for the sale to a related person, rather they filed the price list in Part I. The Revenue took objection that this amounted to mis-statement. The appellant was also asked to show cause as to why Rs. 11,30,570.35p should not be demanded from him as differential duty for the period September, 1986 to May, 1989. The appellant was given a personal hearing and the Collector of Central Excise confirmed the demand for differential duty. Aggrieved by the same, the appellant filed an appeal before the Custom & Gold (Control) Appellate Tribunal. The Tribunal confirmed the demand, but reduced the penalty to Rs. 50,000/-. Civil Appeal No. 5619 of 1994 is directed against that decision of the Tribunal.

2. Based on the original order dated 26.4.1991, further show cause notices were issued to the appellant. The appellant filed an appeal to set aside the order in original, dated 26.4.1991. The Asstt. Collector, Central Excise, dropped the proceedings against the appellant on the ground that the issue regarding "related person" had already been decided in favour of the appellant by the Collector (Appeals), Central Excise, New Delhi, vide order dated 23.8.1991. The Revenue filed an appeal before the Collector (Appeal), Central Excise, New Delhi, and the appellant also filed cross-objections. The Commissioner, Central Excise, New Delhi, remanded the case back to the Adjudicating Authority to re-examine the same in the light of the final order passed on 19.5.1994. In the de novo proceedings before the Asstt. Commissioner, the appellant contended that the order of the Tribunal dated 19.5.1994 could not be made applicable as the order of the appellate authority must hold good. The Asstt. Commissioner confirmed the demand by holding that all the three parties were `related persons in terms of Section 4(4)(c) of the Act. The appellant then preferred an appeal before the Commissioner of Central Excise (Appeals), Delhi. The appeal was dismissed by the Commissioner of Central Excise (Appeals) and aggrieved by the same, the appellant preferred an appeal before the Custom, Excise & Gold (Control) Appellate Tribunal. By final order No. 828/2000-A, the appeal was dismissed and it was held that the four show cause notices issued to the appellant were sustainable in law. Aggrieved by the same, Civil Appeal No. 7216 of 2000 is filed.

3. We heard learned counsel for the appellant as also learned counsel for the Revenue. The counsel for the appellant contended that the appellant-company, Messrs. Flash Laboratories Limited is not a "related person" as against Parle Products Limited and Messrs. Parle Biscuits Limited. Admittedly, the appellant-company is a subsidiary company of Parle Products Limited. Messrs. Parle Products Limited has also another subsidiary company, that is, Messrs. Parle Biscuits Limited. Sixty per cent of the products manufactured by the appellant are sold to Messrs. Parle Products Limited and forty per cent of the products are sold to Parle Biscuits Limited. According to the respondent, the appellant and Messrs. Parle Biscuits could be treated as "related person" within the meaning of Section 4