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TMI Blog2018 (2) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... No allegation has been made by the department that there has been any flow back from Wimco to the assessee towards the allegedly lower pricing adopted by the assessee. We do not find any attempt by the adjudicating authority to prove with irresistible evidence that the relationship between assessee and Wimco has in fact influenced the price of the goods sold to Wimco or otherwise. As already discussed above, the sole attempt made by the de novo adjudicating authority was only to compare 2% of the transactions during the period which has also been done in a very flawed manner. The conclusions reached on such threadbare sampling by the Commissioner cannot be sustained. Appeal dismissed - decided against Revenue. - E/632/2009, E/633/2009, E/634/2009, E/648/2009, E/649/2009, E/650/2009, E/67/2010 - Final Order No. 40351-40357 / 2018 - Dated:- 8-2-2018 - Ms. Sulekha Beevi C.S. Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri J. Shankarraman, Advocate For the Assessee Shri R. Subramaniyan, AC (AR) For the Revenue ORDER Per Bench As the issue involved in all these appeals is common, they are taken up together for common disposal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d based on the principles laid down in Rule 8 of the Valuation Rules would be more appropriate method of valuation. Accordingly, the adjudicating authority has once again confirmed the demand of the very same amount of ₹ 98,11,438/- with interest thereon. Equal penalty has also been imposed under Section 11AC of the Act and Rule 25 of the Central Excise Rules, 2002. Hence this appeal by assessee (E/67/2010). 2. Yet another show cause notice dt. 23.04.2008 had been issued to the assessee on the same issue concerning clearance of goods to a related person viz. M/s.Wimco Ltd. allegedly at lesser price resulting in short payment of duty amounting to ₹ 8,74,526/- with interest for the period 01.04.2007 to 30.09.2007. The show cause notice also proposed imposition of equal penalty under Rule 25 of the Rules read with Section 11AC of the Act and imposition of penalty under Rule 26 on Shri C.A. Nair, Unit Head of the assessee and Shri John Stephen, Senior General Manager of Wimco Ltd. In adjudication, the original authority vide an order dt. 29.10.2008 confirmed the proposed demand of ₹ 8,74,526/- with interest, imposed equal penalty under Rule 25 of the Rules, and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher than the prices to other customers. In 39 cases, the date of sale made to Wimco and other customers was different and also quality code of the product sold to Wimco and other customers was different. Each quality code is different and will vary on account of grammage and reel / sheet variation detailed description. In 118 cases, the quality code of the products sold to Wimco and other customers was different. In 31 cases, date of sale made to Wimco and other customers was different. In 7 cases the quantity of sale made to Wimco and also quality code of the product sold to Wimco and other customers was different. In 5 cases, the invoice number vis-`-vis the quantities did not exist in the data submitted by appellant vide reply dt. 28.2.2008. Thus, out of 235 cases, the comparison made by the Commissioner of date of sale made to Wimco and other customers was erroneous. Out of the remaining cases in two cases price charged to Wimco (relating to Invoice at Sl.No.8 dt. 9.11.2006 and No.10 dt. 4.8.2005) was higher. In the remaining 9 cases, the total quantity purchased by customers other than Wimco was much lower compared to the quantity purchased by Wimco during the same period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the principles of cost construction method as laid down in Rule 8 of the Valuation Rules, 2008. Hence the both the orders of the Commissioner (Appeals) dt. 29.06.2009 and 27.08.2009 are erroneous and require to be set aside and the respective orders of the original authority should be restored. 7.1 Heard both sides and have gone through the facts. For better understanding of the issue at hand, it would be useful to reproduce Section 4(1) (a) of Central Excise Act as follows:- SECTION 4.Valuation of excisable goods for purposes of charging of duty of excise. (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal 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 assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value ; 7.2 Discernably, as per Section 4 (1) (a) of the Central Excise Act, the transaction value would be the price adopted for assessment subject to the condition inter alia that assessee and the buyer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined in the manner specified in Rule 8, which reads as under : Rule 8. Where the excisable goods are not sold by the assessee but are used for consumption by him or onhis behalf in the production or manufacture of other articles, the value shall be onehundred and ten per cent of the cost of production or manufacture of goods. On the basis of these findings and conclusions, the adjudicating authority has once again confirmed demand of differential duty liability of ₹ 98,11,438/- proposed in the SCN dt.07.01.2008. 7.5. On a critical examination of this impugned order dt.28.10.2009, we find that it suffers from a number of aberrations and misconceived conclusions. In the first place, to attract mischief of Rule 9 the situation should be when all the excisable goods are sold by the assessee only to or through a related person. The take away from this provision is that the entire quantity of the excisable goods are sold to or through related person and obviously to no other buyers. Only if this condition is satisfied, the value of such goods will be taken as the value of the goods sold by the related person or, where the related person uses or consumes the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on the Tribunal s Larger Bench decision in Ispat Industries Ltd. v. Commissioner of Central Excise, Raigad [2007 (209) E.L.T. 280 (Trib.-LB)], wherein it was held that the provisions of Rule 8 would not apply in a case where some part of the production was cleared to independent buyers. The main grievance of the assessee at present is that the above plea was not even examined by the learned Commissioner. Today, the learned Sr. Advocate has also relied on the Hon ble Supreme Court s judgment in Commissioner of Central Excise, Chandigarh v. Bharti Telecom Others [2008 (226) E.L.T. 3 (S.C.) = 2008-TIOL-124-SC-CX], wherein it was held that, even if the assessee and their buyer were related, the transaction value should be accepted, if the relation did not influence the price at which the goods were sold. It is submitted that the Apex Court s ruling is equally applicable to a case (like the instant one) governed by the post-1-7-2000 law of valuation. We have heard the learned JCDR also, who has reiterated the findings of the learned Commissioner. 3. The facts of this case are, apparently, similar to those of Bharti Telecom case cited by the learned counsel. The ruling of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irresistible evidence that the relationship between assessee and Wimco has in fact influenced the price of the goods sold to Wimco or otherwise. As already discussed above, the sole attempt made by the de novo adjudicating authority was only to compare 2% of the transactions during the period which has also been done in a very flawed manner. The conclusions reached on such threadbare sampling by the Commissioner cannot be sustained. 7.6 The Tribunal in the remand order had alluded to the Hon ble Supreme Court's judgement in Commissioner of Central Excise, Chandigarh Vs Bharti Telecom and Others [2008-TIOL-124-SC-CX], wherein it was held that even if the assessee and the buyers were related, the transaction value should be accepted if the relation did not influence the price at which the goods were sold; that the said ratio would continue to hold good even for Valuation Rules for post-1.7.2007 since both the Rules embody the same principle. No appeal has been filed by the department against the said Tribunal remand order dt. 23.7.08. Hencethe adjudicating authority is bound by this finding of the Tribunal. Nonetheless, we find that the impugned order is only a rehash of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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