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2022 (3) TMI 399 - CESTAT, NEW DELHIValuation of goods - related party - inter-connected undertakings - goods sold at a lower price - HELD THAT:- The assessee has an interest indirectly in the business of the buyer Ashutosh as the directors of the assessee are also two of the four directors of the holding company of the buyer Ms/ Ashutosh Structurals Pvt. Ltd. However, there is no evidence to show that the buyer Ashutosh also has an interest in the business of the assessee. Therefore, while the interest has been established in one direction there is no evidence of business interest in the other direction namely that there is no evidence that the buyer was interested in the business of the assessee. Therefore, it is found that they are not related persons in terms clause (iv) of section 4(3) (b) - thus, the assessee and M/s Ashutosh are inter-connected undertakings and hence are related in terms of Clause (i) of Explanation to Section 4 (3) (b), they are not related in terms of Clause (ii) (iii) or (iv). Which is the correct valuation rule to be applied for the period prior to 2013 and which is the correct valuation rule to be applied for the period after 2013? - HELD THAT:- The changes which have been brought in w.e.f. 2013 are only in Rules 8, 9 and 10 and not in the remaining rules. In Rule 8, which deals with captive consumption, making mandatory the assessable value to be 115% of the cost of manufacture which was reduced to 110% and 2013. Rules 9 and 10 dealt with only situations where goods were not sold except (ii) or (iii) to a related person prior to 2013. After 2013 these Rules are applicable where either whole or part of goods sold by the assessee to or through related persons. There is no other material change w.e.f. 2013 The prayer of the Revenue that the goods cleared by the assessee and sold to M/s Ashutosh should be valued under Rule 4 cannot be accepted. Rule 4 deals with goods which are sold but not at the time of removal. In such a case the value should be as per the transaction value at any time nearest to the time of removal of goods under assessment subject to adjustment on account of the difference in the dates of delivery of goods. In this case, there is no dispute that the goods were sold at the time of removal. The only allegation is that the assessee and M/s Ashutosh are related persons - the appropriate rule to be applied is Rule 10 (b) both for the period prior to 2013 and after 2013. As Rule 10 (b) squarely covers the transaction, value has to be determined as per this Rule. For the goods cleared to Ashutosh, it should be assessed as if the assessee and the buyer are not related persons. In other words, the transaction value has to be accepted. Appeal allowed - decided in favor of appellant.
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