In Brief
M/s Bilag Industries Ltd. (BIL) manufactured Esbiothrin products under a joint venture agreement where AgrEvo SA held majority shareholding in both BIL and its distribution subsidiary, Aventis Crop-Science (India) Ltd. The revenue authorities treated BIL's sales to Aventis as transactions with a 'related person' and sought to value the goods based on end-customer prices, demanding additional excise duty. The Supreme Court held that mere common shareholding does not establish 'related person' status under excise law. Both parties must have mutual interest in each other's business affairs. Since BIL and Aventis operated on principal-to-principal basis without demonstrable mutual interdependence or interest in each other's affairs, they were not related persons. Additionally, no evidence showed prices were below market rates. The Court allowed the appeal and set aside the revenue's valuation order.
The lawyer headnote and full judgment text are available to registered users.