ORDER

1. THE COMMISSIONER OF CENTRAL EXCISE, MUMBAI II, THE APPELLANT IN THESE APPEALS, AGGRIEVED AGAINST THE ORDERS OF THE CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, MUMBAI (FOR SHORT "THE TRIBUNAL") UPHOLDING THE ORDERS PASSED BY THE AUTHORITIES BELOW, HAS FILED THE PRESENT APPEALS. THE ASSESSEE; NAMELY, M/S UNIVERSAL LUGGAGE MANUFACTURING CO. LTD." MUMBAI (FOR SHORT "THE ASSESSEE") IS THE RESPONDENT IN THESE APPEALS.

2. ACCORDING TO THE APPELLANT, THE ASSESSEE IS ENGAGED IN THE MANUFACTURING OF MOULDED LUGGAGE FALLING UNDER CHAPTER SUB-HEADING 4201.00. THE ASSESSEE FLOATED A 100 PER CENT SUBSIDIARY COMPANY OF ITS OWN UNDER THE NAME AND STYLE OF M/S ARISTOCRAT MARKETING LTD. (FOR SHORT "AML") AND STARTED ROUTING THE BULK OF THEIR SALE TO ITS DEALERS THROUGH THE SUBSIDIARY COMPANY I.E. AML, THEREBY REDUCING THE ASSESSABLE VALUE OF ITS PRODUCTS W.E.F. 1-6-1987. INVESTIGATIONS REVEALED THAT THE ASSESSEE HAD FLOATED AML AND SHIFTED SOME PF THE ADVERTISING EXPENSES WHICH IS TO BE INCLUDED IN THE C ASSESSABLE VALUE TO AML WITH A DELIBERATE INTENTION OF REDUCING THE ASSESSABLE VALUE AND THEREBY EVADING EXCISE DUTY.

3. THE COLLECTOR OF CENTRAL EXCISE, BOMBAY II (FOR SHORT "THE COLLECTOR") ISSUED A SHOW-CAUSE NOTICE TO THE ASSESSEE ON 29-6-1990 TO SHOW CAUSE AS TO WHY (I) THE PRICES :(AFTER THE PERMISSIBLE DEDUCTIONS) AT WHICH THE GOODS WERE SOLD BY AML TO THEIR DEALERS SHOULD NOT BE TAKEN AS THE ASSESSABLE VALUE FOR THE PURPOSE OF CHARGING CENTRAL EXCISE DUTY; (II) THE DIFFERENTIAL DUTY SHOULD NOT BE RECOVERED FROM THE ASSESSEE UNDER SECTION 11-A(1) OF THE CENTRAL EXCISES ARID SALT ACT, 1944 READ WITH RULE 9(2); (III) PENALTY SHOULD NOT BE IMPOSED UPON THE ASSESSEE UNDER RULE 173-Q OF THE CENTRAL EXCISE RULES, 1944; AND (IV) THE PLANT, BUILDING, LAND, MACHINERY, ETC. SHOULD NOT BE CONFISCATED, UNDER THE PROVISIONS OF RULE, 173-O.

4. THE RESPONDENT CONTESTED THE NOTICE. IT WAS ADMITTED THAT AML IS A RELATED PERSON TO THE ASSESSEE. THE NOTICE WAS DISCHARGED BY THE COLLECTOR HOLDING THAT THERE WAS NO EVASION OF THE EXCISE DUTY BY THE ASSESSEE AND THAT THE ASSESSEE HAD CLEAR THE EXCISABLE GOODS TO AML AT THE FACTORY GATE AT THE SARNE PRICE, AT WHICH IT HAD BEEN CLEARED TO THE DEALERS INCLUDING THE CANTEEN STORE DEPARTMENT (CSD). SINCE THE ASSESSEE HAD SOLD THE GOODS AT TL;1E FACTORY GATE TO AML ON THE SAME PRICE AT WHICH IT HAD BEEN SOLD TO OTHER DEALERS AND CSD, AML ALTHOUGH A RELATED PERSON, WAS NOT SHOWN ANY FAVOUR OR THAT THE SALE MADE TO AML WAS NOT DONE TO EVADE THE EXCISE DUTY. THE COLLECTOR IN HIS ORDER RECORDED TWO SIGNIFICANT FINDINGS, WHICH ARE AS UNDER:

(I) ON CLOSE PERUSAL OF RECORDS, I FIND THAT THE ASSESSEE HAD FILED PRICE LISTS I.E. PRO FORMA I WITH EFFECT FROM 1-6-1987 AS STATED IN THE SHOW-CASE NOTICE. THE ASSESSEE HAD CLEARED EXCISABLE GOODS TO THE TUNE OF RS 46,63,80,823.64 DURING THE PERIOD JUNE 1987 TO MAY 1988, AT THEIR DECLARED PRICES. DURING THE RELEVANT PERIOD, SALES TO M/S AML WERE RS 29,88,30,105.00, SALES TO DEALERS WERE RS 3,21,08;308.00, SALES TO CANTEEN STORES DEPARTMENT WERE RS 13,31,39,043.49 AND SALES TO OTHERS I.E. EXPORT AND DGS&D WERE RS 23,03,367.15.

(II) FROM THE SALES PATTERN OF M/S ULM, IT CAN BE OBSERVED THAT M/S ULM HAD EFFECTED TOTAL SALES OF RS 29,88,30,105.00 TO M/S AML AND TO OTHERS TOTAL SALES OF RS 16,75,50,718.64 (I.E. TO DEALERS, CSD, DGS&D AND EXPORTS) DURING THE PERIOD JUNE 1987 TO MAY 1988. SIMILARLY THE SALES EFFECTED DURING THE, PERIOD JUNE 1988 TO MARCH 1989 WERE RS 1841.86 LAKHS TO M/S AML AND TO OTHERS WERE RS 1369.39 LAKHS (I.E. TO DEALERS, CSD). ALL THE SALES HAD BEEN EFFECTED AT THE PRICE FILED BY THE ASSESSEE. IN PRO FORMA. IT IS, THUS, EVIDENT THAT NO SPECIAL CONSIDERATION HAD BEEN EXTENDED TO M/S AML WHICH IS A SUBSIDIARY CONCERN OF M/S ULM FURTHER THE SALES EFFECTED TO CSD, EXPORTS, DGS&D ARE COVERED WITHIN THE MEANING OF SECTION 4( 1)( A) AS DISCUSSED HEREINBEFORE."

5. THE AFORESAID FINDINGS OF THE COLLECTOR HAVE BEEN UPHELD BY THE TRIBUNAL BY OBSERVING THUS:

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