When same partners in trading & manufacturing organisation

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Pradeep (Querist)
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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..

U S Sharma

U S Sharma (Expert)
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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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