2013 (10) TMI 494 - AT - Central Excise

Valuation - sale thorough related persons Applicability of Rule 9 of Valuation Rules - Extended period of limitation - Waiver of pre-deposit Held that - The same issue was the subject matter of the appeal filed by them before the Tribunal and this tribunal had taken a view that Rule 9 of Valuation Rules would not be applicable since the entire goods manufactured are not sold through related person - Rule 9 of Valuation Rules may not be applicable in this case in view of the fact that the entire quantity manufactured is not sold through related person - the question whether extended period could have been invoked again is also relevant and there are decisions to support this submission - the entire demand is beyond the normal period of limitation, the appellant has made out a prima facie case for waiver - the requirement of pre-deposit waived during the pendency Stay granted.

Issues:
1. Applicability of Rule 9 of Valuation Rules in the case of selling steel tubes to a related person at a lower price.
2. Invocation of extended period for confirming duty demand.
3. Change in the constitution of the company and its impact on duty payment.
4. Prima facie case for waiver of pre-deposit and granting stay against recovery during the appeal.

Analysis:
1. The Appellate Tribunal considered the issue of the applicability of Rule 9 of Valuation Rules in a case where the appellant was selling steel tubes to a related person at a lower price. The Tribunal noted that the entire quantity manufactured was not sold through the related person, leading to the conclusion that Rule 9 may not be applicable in this scenario. This was in line with the Tribunal's previous decision on a similar issue where they had granted a stay on duty payment considering that a portion of the duty had already been paid.

2. The Tribunal examined the invocation of the extended period for confirming the duty demand. The appellant argued that since the earlier proceedings had addressed the same issue, the extended period should not have been applied. The Tribunal acknowledged that there were precedents supporting this argument and found that the entire demand fell beyond the normal period of limitation. Consequently, the Tribunal determined that the appellant had established a prima facie case for waiver, leading to the waiver of the pre-deposit requirement and the grant of a stay against recovery during the appeal process.

3. The issue of a change in the constitution of the company and its impact on duty payment was raised during the proceedings. The Additional Commissioner contended that the company's constitution had changed without informing the department, and the appellants had committed to complying with the law by paying duty based on the price at which the related person was selling the tubes. This argument was considered by the Tribunal in the context of the overall case but did not have a significant impact on the final decision regarding the waiver of pre-deposit and the stay against recovery.

4. In conclusion, the Tribunal, represented by Shri B.S.V. Murthy, analyzed the submissions from both parties and made a decision in favor of the appellant based on the non-applicability of Rule 9, the question of invoking the extended period, and the establishment of a prima facie case for waiver. The order was dictated and pronounced in open court, emphasizing the Tribunal's decision to waive the pre-deposit requirement and grant a stay against recovery during the pendency of the appeal.

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