2008 (7) TMI 743 - AT - Central Excise

Summary

Issues involved: Dispute over valuation of goods sold between related parties, application of valuation rules, determination of undervaluation, appeal against Commissioner (Appeals) order.

The judgment by the Appellate Tribunal CESTAT, New Delhi pertained to a dispute regarding the valuation of goods manufactured by M/s Him Teknoforge Ltd. and sold to M/s Him Gears (P) Ltd. The Revenue contended that the selling price of the goods should be based on the prices charged by M/s Him Gears (P) Ltd. due to their alleged relationship as related persons. The original adjudicating authority upheld the demand and penalty, which was later set aside by the Commissioner (Appeals).

The appellate authority found that not all goods were sold to M/s Him Gears (P) Ltd. and noted sufficient sales to other independent buyers. It was observed that the prices charged to M/s Him Gears (P) Ltd. were comparable to those charged to independent parties, with some instances of lower or higher prices. The Tribunal emphasized that the sales between the two entities were not undervalued, as the prices were found to be in line with market norms and legal provisions.

The Revenue, in their appeal, reiterated the related persons argument based on the familial relationship between directors of the two companies. However, the Tribunal determined that the two companies operated independently, and the sales could not be considered as transactions between related parties. Additionally, the Tribunal upheld the Commissioner (Appeals) finding that the prices were not undervalued, as they were either similar to or higher than prices charged to independent buyers. Consequently, the Tribunal rejected the Revenue's appeals, affirming the Commissioner (Appeals) decision on the valuation of goods sold between the two companies.