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2009 (10) TMI 345 - AT - Central ExciseValuation- The appellant-company is a manufacturer of motor vehicle parts and they are selling tailor-made goods to industrial buyers; they are also exporting goods to Nepal under special procedure meant for Nepal export. They were selling motor vehicle parts for replacement market through four distributors. The dispute relates to sales made through distributors. Enterprises were related persons to the appellant-company and they were getting discount of 48% in respect of sales made to them and accordingly, show cause notice was issued proposing to adopt the sale prices of the said distributors to independent parties and proposing demand of duty and imposition of penalties. Commissioner by his impugned order accepted the valuation for the period 17-8-2001 to 31-3-2005 noting that other non-related parties were also getting the discount of 48%. In addition, he imposed penalty of Rs. 40 lakhs each on Shri Rajiv Gambhir and Shri Sanjay Gambhir under Rule 26 of Central Excise Rules, 2001 and Rule 26 of Central Excise Rules, 2002. Held that- (a) The appellant-company and the partnership firm M/s. D.D. Sales Corporation are related persons and the sale prices of D.D. Sales Corporation is to be taken for the purpose of assessment and differential duty and interest on this ground is sustainable within the normal period of limitation. However, the Commissioner while determining the differential duty due, shall consider the claim for abatement of cash discount, turnover discount and issue a speaking order after granting reasonable opportunity of hearing to the appellants. (b) The penalties on the appellant-company and the Directors are set aside. The appeals of the appellant-company is allowed partly as above and the appeals of the appellant-Directors allowed with consequential relief as per law.
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