2004 (8) TMI 419 - AT - Central Excise

Summary

Issues: Pre-deposit of duty amount, rejection of transaction value based on interconnected undertakings, consideration of arms length transaction, acceptance of plea in previous proceedings, department's dropping of charges, independent assessments.

Pre-deposit of duty amount:
The appellants were required to pre-deposit a duty amount of Rs. 45,222 for the appeal hearing. The rejection of the transaction value was based on the appellants being directors of another company, considered interconnected undertakings, leading to assessments under Rule 9 of the Valuation Rules.

Rejection of transaction value based on interconnected undertakings:
The rejection of the transaction value was contested by the appellants' counsel, arguing that being directors of another company does not justify rejecting the value. They emphasized that the transaction with the other company was at arms length without any extra consideration. The department had dropped charges in previous and subsequent proceedings, acknowledging the need to accept the transaction value.

Consideration of arms length transaction:
The appellants' counsel presented orders from previous proceedings where charges were dropped after accepting that the transaction value should be recognized. The appellants and the other company were deemed independent units by the department, leading to independent assessments. The tribunal noted that the department's actions in dropping charges indicated a prima facie case in favor of the appellants, granting a waiver of pre-deposit and staying the recovery.

In conclusion, the tribunal allowed the stay application, recognizing the appellants' prima facie case in light of the department's acceptance of independent assessments. The waiver of pre-deposit was granted, and the recovery was stayed, with the appeal scheduled to proceed in due course.