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TMI Blog2015 (11) TMI 1241X X X X Extracts X X X X X X X X Extracts X X X X ..... be disturbed, therefore value as provided under Rule 8 is not applicable in the present case. - When for the same goods transaction value is available i.e. transaction value at which the goods are sold to independent buyers, then there is no scope of any notional value such as valuation in terms of Rule 8 or otherwise. For this reason also valuation of Rule 8 cannot be applied in the present case. - appellant have correctly valued their goods sold to their three interconnected undertakings, therefore the impugned order is not sustainable and deserve to be set aside - Decided in favour of assessee. - Appeal No. E/994/10-MUM - Final Order No. A/913/2015-WZB/EB - Dated:- 3-3-2015 - P. K. Jain, Member (T) And Ramesh Nair, Member (J) For the Appellant : Shri Vinay Sejpal, Adv For the Respondent : Shri N N Prabhudesai, Superintendent (AR) ORDER Per Ramesh Nair This appeal is directed against Order-in- Original No. 05/2010/C dated 11/1/2010 passed by the Commissioner of Central Excise, Nagpur, wherein total demand of ₹ 8,03,787/-, interest and penalty of equal amount under Section 11AC and also equal amount of penalty under Rule 25 of Central Excise Rules, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther clarified that while dealing with the transactions between interconnected undertakings, if the relationship has described in clause 2, 3 or 4 does not exist and the buyer is not holding company or subsidiary company then for assessement purpose they will not be considered related. It is his submission that in view of the above provisions, even though the three buyers company are interconnected undertaking of the appellant, these three buyers cannot be treated as related person. Therefore whole foundation of the case gets demolished. He submits that in the impugned order Ld. Commissioner has held that all the three buyers as interconnected undertaking and due to this reason treated as related person and valuation was attracted under rule 8 and 9 of Central Excise Valuation Rules, 2000, which is absolutely incorrect as per the explanation given above. He submits that since all the three buyers are not related therefore valuation under rule 8 and 9 of Central Excise Valuation Rules, 2000 is not applicable and the sale price of appellant to these companies is the correct transaction value and excise duty on the said value cannot be found fault. Ld. Counsel, without prejudice to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant and buyer companies are related person. He prays that impugned order be maintained and the appellant's appeal be rejected. 4. I have carefully considered the submissions made by both the sides and perused the record. 5. The appellant have admitted that the three buyers companies are their interconnected undertakings. However merely because buyers are interconnected undertakings it is not sufficient to hold that the companies are related persons. related' is defined under section 4(3)(b) which is reproduced below: Section 4(3)(b) in the Central Excise Act, 1944 (b) persons shall be deemed to be related' if (i) they are inter-connected undertakings; (ii) they are relatives; (iii) amongst them the buyer is a relative and distributor of the assessee, or a sub-distributor of such distributor; or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. Explanation. In this clause (i) inter-connected undertakings shall have the meaning assigned to it in clause (g) of section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (64 of 1969); and (ii) relative shall have th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moval of the goods, such value shall. a. in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the asessee and the buyer of the goods are not related and the price is the sold consideration for the sale, be the transaction value; b. in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. 2. The provisions of the section shall not apply in respect of any excisable goods for which a tariff value has been fixed under sub-section (2) of Sec.3. a. assessee means the person who is liable to pay the duty of excise under this Act and includes his agent; b. persons shall be deemed to be related if. i. they are inter-connected undertakings; ii. they are relatives; iii. amongst them the buyer is a relative and distributor of the assessee, or a sub-distributor of such distributor. Or iv. they are so associated that they have interest, directly or indirectly, in the business of each other. Explanation- in this clause. i. inter-connected undertakings shall have the meaning assigned to it in Clause(g) of section 2 of the Monopolies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her clear that while dealing with transaction between interconnected undertaking, if the relationship as described in clause (ii), (iii) or (iv) does not exist and buyers also not holding or subsidiary then for assessment purpose they will not be considered related. In view of above clear position as regard transaction between interconnected undertakings, it is crystal clear that in existing status of interconnected undertaking they should fall under the category of sub clause 2,3 or 4 of Section of 4(3)(b). In the present case Ld. Commissioner emphasized on the fact that this appellant and buyers company are interconnected undertaking therefore they are related and consequently applied rule 8 of Central Excise Valuation Rules, 2000 and adopted the valuation of cost construction method. Ld Commissioner have not brought any material to establish that the relationship between appellant and buyers company are one of the relationship as prescribed under sub clause (ii), (iii) or (iv) of Section 4(3)(b) of Central Excise Act therefore in our considered view even if it is accepted that the buyers company are interconnected undertaking of the appellant company it cannot be treated as rela ..... X X X X Extracts X X X X X X X X Extracts X X X X
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