In absence of mutuality of interest two persons cannot be treated as related

Brief of the case:

• The Hon’ble Supreme Court in the case of M/s Goodyear South Asia Tyres held that in order to brand two persons as relatives on the basis of mutuality of interest it is necessary to show that such interest is from both sides in the business of one another.
• Thus, the fact that assessee company is a joint venture of buyers and receiving certain assistance from buyers to smoothen its operations would not result in the interest of business of one another, at the best it is unilateral interest of buyer in the business of assessee company.

Facts of the case:

• The assessee is a joint venture of RPG SATL and Goodyear , known as M/s SATL. It was formed for manufacture OTR tyres and Radial tyres exclusively for CEAT and Goodyear under their brand names.
• The assessee received unsecured interest free loan of Rs.85.66 crores from CEAT and Goodyear. Some moulds and other equipments worth Rs. 10 crores free of cost, on loan basis, were also given by these two companies to the assessee.
• Such assistance by promoter companies to assessee was examined by the customs officer who issued show cause notice requiring to show cause as to why the assessee and promoter companies (buyers) are not to be treated as related persons as per Sec 4(4)(c) of the Act.
• After considering the reply of assessee, the adjudicating authority demanded differential duty by making valuation treating the assessee and buyers as related persons.
• The appeal of assessee was allowed by tribunal on the ground that there was no mutuality of interest in the present case.

Contention of the Revenue: