2016 (1) TMI 880 - AT - Central Excise

Under-valuation being from related persons - interconnected undertaking - Both the entities are controlled by the same person - Held that - All the observations are fact based observations. We do not find any infirmity in the same. Therefore, we conclude that M/s.DKL and M/s. Delite Furniture 2000 are related persons. Consequently, the demands confirmed on account of under-valuation being related persons are upheld. Demands hit by limitation - Held that - We do not agree with this contention on fact that M/s. DKL and Delite Furniture 2000 are related persons and the fact that M/s. Delite Furniture 2000 controlled by M/s. DKL was not known to the department prior to investigation. In these set of facts, we hold that the extended period of limitation is rightly invoked in this matter. Computation of assessable value - inclusion of packaging charges - Held that - We further find that the appellant have failed to discharge their obligations to prove that the packaging charges are being recovered in special circumstances from the customers. Therefore, the Authorities Below has rightly included the packaging charges in the assessable value. - Decided against the assessee.

Summary

Issues:
- Allegation of under-valuation of goods cleared to related persons
- Invocation of extended period of limitation
- Inclusion of packaging charges in the assessable value

Allegation of under-valuation:
The case involved appeals against orders demanding differential duty, interest, and penalties due to alleged under-valuation of goods cleared to related persons. The appellants contested the related persons' status, arguing that no incriminatory documents were found during investigation to establish their relationship. They also disputed the timing of the show cause notice, claiming it was beyond the limitation period. However, the authorities found evidence indicating a connection between the entities, including shared premises, common staff, and financial involvement. The Tribunal upheld the related persons' status, concluding that the demands for under-valuation were justified.

Invocation of extended period of limitation:
Regarding the limitation period, the appellants argued that the demands were time-barred. However, the Tribunal held that the extended period of limitation was rightly invoked due to the related persons' status not being disclosed to the department earlier. This lack of prior knowledge justified the extended period for initiating the demand.

Inclusion of packaging charges:
The appellants failed to demonstrate that the packaging charges were recovered under special circumstances from customers. As a result, the Authorities Below correctly included these charges in the assessable value. Despite the appellants' arguments, the Tribunal upheld the decision, stating that the packaging charges were rightly considered in the assessable value.

In conclusion, the Tribunal dismissed the appeals filed by the appellants, upholding the impugned order. The decision affirmed the demands for under-valuation based on the related persons' relationship, justified the invocation of the extended limitation period, and upheld the inclusion of packaging charges in the assessable value.