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TMI Blog2016 (12) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... icient for holding as related person. The show cause notice or original order have not brought any material to establish that the relationship between respondent 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 can not be treated as related person in terms of Section 4(3)(b). In absence of relationship as specified under sub clause (ii), (iii) or (iv) of Section 4 (3) (b). In this position, the transaction value of the goods between respondent and the so called interconnected undertaking is correct valuation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Based on these observations the department came to a conclusion that the appellant and Rajaram are inter connected undertakings though both of them are separate legal entities, being private limited companies. As the definition of related person included interconnected undertaking under Section 4 of the Central Excise Act, the department proposed to reject the transaction value between the appellant and Rajaram. 2. On the basis of above observations, show cause notice was issued wherein valuation of the excisable goods supplied by the Respondent to 'Rajaram' was proposed under Rule 8 of Central Excise Valuation Rules, 2000, according to which the valuation was done on the basis of cost of production plus 15% notional profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 'interconnected undertaking'. Therefore on this basis itself it cannot be said that both companies are related person. Secondly even if the contention of the Revenue is accepted that both companies are interconnected even then it is not related person in terms of Section 4(3)(b) read with Rule 9 of Central Excise Rules, 2000. As per the provisions only those undertaking which is holding company are subsidiary can be related person. In the present case even it is not the case of the department that the buyer is either holding or subsidiary of the respondent. Even on fact also buyer is neither holding or subsidiary company of the respondent therefore there is no relationship between both the companies. He placed reliance on the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified under sub clause (ii), (iii) or (iv) of clause (b) of section 4 of the act. The rule 9 is reproduced below:- Rule 9. When the assessee so arranges that the excisable goods are not sold by an assessee except to or through a person who is related in the manner specified in either of sub-clauses (ii), (iii) or (iv) of clause (b) of sub-section (3) of section 4 of the Act, the value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal, to buyers (not being related person); or where such goods are not sold to such buyers, to buyers (being related person), who sells such goods in retail : Provided that in a case where the related person does not sell the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking therefore they are related and consequently proposed rule 8 of Central Excise Valuation Rules, 2000 and adopted the valuation of cost construction method. The show cause notice or original order have not brought any material to establish that the relationship between respondent 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 can not be treated as related person in terms of Section 4(3)(b). In absence of relationship as specified under sub claus e (ii), (iii) or (iv) of Section 4 (3) (b). In this position, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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