2017 (9) TMI 771 - AT - Central Excise

Valuation - related party transaction - Held that - The learned counsel for the respondent has argued that since Revenue has decided not to file appeal before Hon ble Supreme Court the ground raised by Revenue does not survive - the ground raised by the Revenue for preferring present appeal does not hold good any more - appeal dismissed - decided against Revenue.

Summary

Issues involved: Determination of value of clearance for captive consumption under Section 4(1)(a) or Section 4(1)(b) read with Rule 9 of Valuation Rules, 2000.

Analysis:
The appeal was filed by the Revenue against Order-in-Appeal No. 72-CE/ALLD/2007 passed by the Commissioner of Customs and Central Excise (Appeals), Allahabad. The main issue in question was whether the value of clearance to a related person for captive consumption should be determined under Section 4(1)(a) based on transaction value of the sale or under Section 4(1)(b) read with Rule 9 of Valuation Rules, 2000 by taking 115% of the cost of production. The respondent, engaged in manufacturing Iron & Steel Alloy products, dispatched excisable goods to their sister concern on a stock transfer basis. The Revenue sought to assess the goods at 115% of the cost of manufacture as per the Central Excise Valuation Rules, 2000. In the first appeal, the respondent argued that the value of the transaction with independent buyers was lower than the value used for Central Excise Duty on goods sent to the sister concern. The Commissioner (Appeals) allowed the appeal based on a decision by the Larger Bench of the Tribunal. The Revenue, dissatisfied with this decision, filed the present appeal, claiming that the decision in the case referred to had not yet been finalized as an appeal was pending before the Supreme Court.

During the hearing, the Assistant Commissioner Central Excise, Raigad, submitted a letter informing that the Central Board of Excise and Customs had decided not to appeal against the Tribunal's decision in the case cited by the respondent. The respondent's counsel argued that since the Revenue chose not to appeal to the Supreme Court, the grounds raised by the Revenue no longer held relevance. After considering the arguments presented, the Tribunal concluded that the grounds raised by the Revenue for filing the appeal were no longer valid. Consequently, the appeal filed by the Revenue was dismissed, and the respondent was entitled to consequential relief as per the law.

In conclusion, the Tribunal's decision was based on the fact that the Revenue's grounds for appeal had become irrelevant due to the decision not to appeal to the Supreme Court. The respondent's position was upheld, and the appeal by the Revenue was dismissed, granting the respondent the appropriate relief as per the law.