2017 (5) TMI 42 - AT - Central Excise

Valuation - related party transaction - case of appellant is that confirmation of demand through the impugned order is not sustainable in the absence of result of comparison of prices at which the goods were sold to PM and the goods that were sold by the appellant to other parties during relevant period - Held that - the appellant-assessee has raised very serious grounds against the original authority that the original authority has not complied with the directions of this Tribunal - also, confirmation of demand was not on the basis of verifications carried out in respect of the prices at which goods were sold to alleged related person and to other buyers during the relevant period - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Allegation of short levy demand due to sales to a related person, failure of original authority to verify sales to independent buyers, contempt of tribunal's order, misinterpretation of tribunal's order, failure to trace invoices from seized records.

Analysis:

1. The appeal was directed against Order-in-Original No. 46/Commissioner/Noida/2007 dated 18/12/2007 passed by the Commissioner of Central Excise & Customs, Noida. The case involved the appellants being engaged in the manufacture of polyurethane moulded furniture, parts of motor vehicles, and accessories. A show cause notice dated 15th July, 1996 alleged that goods were cleared to a related person, Pfeda Marketing (PM), who sold them at higher prices. A demand of differential duty was raised, leading to a Final Order by the Tribunal in 2006. The Tribunal set aside the order and remanded the matter for verification of factual aspects regarding sales prices to related and unrelated parties for a final determination of the dispute.

2. The grounds of appeal against the subsequent Order-in-Original No. 46/Commissioner/Noida/2007 included failure by the original authority to verify sales to independent buyers as directed by the Tribunal, contempt of the Tribunal's order, misinterpretation of the Tribunal's order, and failure to trace invoices from seized records. The appellant contended that confirmation of demand was not sustainable without comparing prices at which goods were sold to PM and other buyers during the relevant period.

3. Upon hearing both parties, the Tribunal found serious grounds against the original authority for not complying with the Tribunal's directions and confirming the demand without verifying the sales prices to the related person and other buyers during the relevant period. Consequently, the Tribunal held that the impugned order was not sustainable and allowed the appeal, entitling the appellant to consequential relief as per law.

This detailed analysis covers the issues involved in the legal judgment, highlighting the key arguments, directions, and decisions made by the Tribunal in response to the appeal.