2016 (8) TMI 789 - AT - Central Excise

Valuation - cast articles cleared to independent buyers as well as other interconnected parties, at the same assessable value - Held that - the Larger Bench of the Tribunal in the case of Ispat Industries Ltd. vs. CCE 2007 (2) TMI 5 - CESTAT, MUMBAI has observed that where the goods are sold to related persons as well as to independent buyers, the transaction value charged to the independent buyers shall apply in the case of supply of goods to the related person also. The said decision stand followed in the recent judgment of the Tribunal in the case of Handy Wires Pvt. Ltd. vs. Commissioner of Central Excise, Nagpur 2015 (11) TMI 1241 - CESTAT MUMBAI . Examining an identical situation, the Tribunal observed that the goods sold to interconnected undertaking have to be assessed to duty at the same value at which the said goods are sold to independent whole sale buyers. - Decided against the Revenue

Summary

Issues:
- Dispute over assessable value for goods sold to interconnected parties
- Application of Rule 4 (1) (b) and Rule 9 of the Valuation Rules
- Interpretation of related parties in the context of interconnected undertakings
- Comparison of prices for goods sold to independent buyers and interconnected parties
- Precedents set by Tribunal judgments in similar cases

Analysis:
The case involved a dispute regarding the assessable value of goods sold by the appellant to both independent wholesale buyers and interconnected undertakings. The Revenue objected to the assessable value adopted by the appellant for sales to related parties, invoking Rule 4 (1) (b) and Rule 9 of the Valuation Rules. The Commissioner (Appeals) ruled in favor of the assessee, emphasizing the need to establish interconnected undertakings as related parties. He referenced a Board Circular and various legal precedents to support his decision that Rule 9 does not apply when sales are made to both related and unrelated persons.

The Tribunal noted that the appellant sold goods at the same value to both independent buyers and interconnected undertakings. Citing the decision in Ispat Industries Ltd. vs. CCE and Handy Wires Pvt. Ltd. vs. Commissioner of Central Excise, the Tribunal held that when goods are sold to related and independent buyers, the transaction value for independent buyers applies to related parties as well. As the issue was settled by previous Tribunal judgments, the impugned order of the Commissioner (Appeals) was upheld, and the Revenue's appeal was rejected.

In conclusion, the Tribunal's decision reaffirmed the principle that when goods are sold to both related and independent parties at the same value, the transaction value for independent buyers should be applied to related parties as well. The judgment relied on established legal interpretations and precedents to resolve the dispute over the assessable value of goods sold to interconnected undertakings, ultimately ruling in favor of the appellant and rejecting the Revenue's appeal.