2008 (6) TMI 418 - AT - Central Excise

Summary

Issues involved: Valuation of goods cleared by respondent-company to another company where the chairman of both companies is the same.

Valuation Issue:
The issue in this case pertains to the valuation of goods cleared by the respondent-company to another company where the chairman of both companies is the same. The adjudicating authority had held that both companies are related persons and that the price charged was incorrect, leading to a confirmation of differential duty. However, the Commissioner (Appeals) set aside the order-in-original, emphasizing the lack of documentary evidence proving any extra commercial interest flowing between the companies. The Commissioner cited the case of Union of India & Others v. ATIC Industries Ltd. to define the concept of "related person" under Section 4(4)(c) of the Central Excise Act, 1944. The Revenue contended that both companies are related persons, but upon review, it was found that during the relevant period, the judgment in Alembic Glass Industries Ltd. v. CCE was applicable. The Supreme Court in that case clarified that mere shareholding or common directors between companies does not establish them as related persons. Therefore, the impugned order holding that the companies were not related persons and the assessable value was correctly determined was upheld, leading to the rejection of the Revenue's appeals and the disposal of the Cross Objections filed by the respondents.