2002 (11) TMI 167 - AT - Central Excise

Summary

Issues involved:
The issue involves the finalization of provisional assessment of tyres, tubes, etc., based on the relationship between the appellants and another company, leading to a duty demand confirmation.

Summary:

1. The appeal arose from the Commissioner of Central Excise (Appeals), Mumbai's decision upholding the provisional assessment order by the Dy. Commissioner of Central Excise, Aurangabad. The assessment was based on the relationship between the appellants and M/s. Goodyear India Ltd., resulting in a duty demand confirmation of Rs. 25,76,706.

2. The Tribunal noted that in a previous case involving M/s. South Asia Tyres Ltd., it was established that the appellants and M/s. Goodyear India Ltd. are not related persons. The applicable section in this case was Section 4 of the Central Excise Act, inserted with effect from 1-7-2000, defining "related" persons based on specific criteria.

3. While the appellants acknowledged being inter-connected undertakings with M/s. Goodyear India Ltd., they argued that Rule 9 of the Valuation Rules did not apply as they were not related in the specified manner. They contended that Rule 10(b) should be applied for valuation purposes.

4. The Tribunal agreed with the appellants, emphasizing the language of Rules 9 & 10. Rule 9 pertains to goods sold through related persons, while Rule 10 applies when goods are sold to inter-connected undertakings. The Tribunal found that the department's valuation method was incorrect, and the price at which the goods were sold to M/s. Goodyear India Ltd. should determine the assessable value.

5. Consequently, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellants based on the interpretation of the relevant valuation rules.