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When same partners in trading & manufacturing organisation

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01 November 2012 we are registered with Central Excise department for manufacturing activity of steel product.We have also a trading Organisation with other name by same partners. now my question is we are purchasing from manufacturing organisation for 100 + 12.36% + vat and selling to customer 140 + vat Is it correct method or not. please reply by mentioning the section/rule where it has been stated so. If no permission is required then also state the section/rule where it has been stated so and also the procedure for doing such trading activity..
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U S Sharma

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U S Sharma (Expert)
10 November 2012 highly offensive, as both the firms would be treated as "related parties" and duty is payable on the sale to 1st unrelated party i.e on 140/-

here if found department will impose the case of evasion for manipulating revenue for sale to related parties at under valuation
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