K.L. Rekhi, Member (T)

1. The Respondent is not represented today. He had sent a letter dated 31.8.1988 to the Registry in which he noted the date of hearing fixed for today and stated that he would take further action on receipt of a copy of the "Revision Application". By "Revision Application" perhaps he meant the reference letter sent by the Appellate Collector to the Central Government for initiating revision proceedings under the then Section 36(2) of the Central Excises and Salt Act, 1944. The Appellate Collector sent him a copy of his said letter-dated 14/15.4.1980 on 29:8.1988. However, the Respondent is still not represented even though he was duly notified of the date of hearing and he was well aware of it. There is no request for adjournment on record. In the circumstances, the Bench decided to take up the hearing and disposal of this appeal on merits.

2. We have heard the Ld. Representative of the Department and have perused the record, particularly the written submissions made by the Respondent in reply to the Central Government's Revision Show Cause Notice dated 30.5.1980 aforesaid.

3. The controversy relates to the price list No. 13/76 which the Respondent fled before the Assistant Collector on 20.8.1976. The Respondent company was at that time a proprietary unit. The unit manufactured Motor-Vehicle Trailers. The proprietor of the Respondent company was also the Kartha' of the Hindu Undivided Family which owned the agency company named M/s. Vikrama Engineering Company (Agency). It appears that In general the manufacturing unit disposed of the Trailers manufactured by through various agents/dealers and the HUF owned agency company was one; of them The Respondent has been contending that 95% of the business was done through other agents/dealers and only about 5% business was done through the HUP owned company.

4. The Revision Show Cause Notice states that among the various types of Trailers manufactured by the Respondent Unit, the following type was disposed of only through the HUF owned agency company and, therefore, it should be held that this model was disposed of by the Respondent through a 'related person;

"Vikrama Double Axle Four Wheeler 6.8 Metric Tonnes gross load capacity; non-tipping Trailer, of body size 12' x 6' x 2', with steel hubs, 45" (11 and 3 blades) springs parking brakes and fitted with 715 x 16.10 ply light truck tyres and painted".

The Respondent does not deny that the above model of Trailers was disposed of only through the agency company and the agency company was given 10% discount on the sale price of each Trailer. The contention of the Respondent is,, and this is also the view of the Appellate Collector, that it was just a coincident that the orders for the above particular model came only through the agency company. The Respondent makes a hypothetical statement that if other agents/dealers had also placed orders for the aforesaid particular model, they too would have been given the same 10% discount The Respondent also contends that mutuality of business interest was not established just because the proprietor of the manufacturing unit was also the Kartha' of the HUF owned agency company. The Respondent pleads that the manufacturing unit and the agency company were two physically separate entities and were separately assessed for income tax, sales-tax etc.

5. On careful consideration, we find that the controversy regarding the meaning of 'related person' has since been settled by the judgment of the Hon'ble Supreme Court in the case of Bombay Tyres International Ltd. [1983 E.L.T. 1896 (SC) ]. According to the Supreme Court judgment, for the first part of the definition of 'related person' in Section 4(4)(c) of the Central Excises and Salt Act, 1944, mutuality of interest should be there between the two units and for the second part of the said definition, the Distributor should also be a relative of the assessee. We find that the case of the Respondent fits in both parts of the definiti