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2018 (8) TMI 530 - AT - Central ExciseValuation - related party transaction - whether the appellants herein namely; M/s L. G. & M/s Onida are related to the appellant - M/s VPIPL as per the provisions of Section 4(3)(b) of the Act? - If they are so related, whether the goods cleared by M/s VPIPL to the other appellants are liable to be valued in the light of Rules 8 & 9 read with Central Excise Valuation Rules, 2000 for the purpose of payment of duty on such goods? - whether penalties have been rightly imposed on M/s VPIPL under Rule 173Q of the Central Excise Rules, 1944 along with penalty under Rule 26 of the Central Excise Rules, 2001/2002 on M/s L. G. & M/s Onida? Held that:- It is clear that M/s VPIPL was manufacturing Plastic Molded Components for and on their own behalf. Such observation is also corroborated on looking to the Terms & Conditions with M/s L. G., laying down about M/s L. G. having right of rejection, where the goods supplied by M/s VPIPL were not found in accordance with the Specifications and Quality. In such eventuality, it is M/s VPIPL who have to make arrangement for the transportation of the rejected goods from the premises of M/s L. G. to their own factory. The order passed by the Commissioner of Central Excise, Noida, does not provide any evidence which could nullify the Terms of the Agreement, referred to above. The Terms of the Agreement goes on to establish that such terms could only be where the Transactions between the Buyer & Seller are on Principle-to-Principle basis. - There is not an iota of evidence which could establish about M/s L. G./M/s Onida having any Managerial, Administrative and Financial control on M/s VPIPL or vice-versa. M/s VPIPL has Share-Holding of the members of Batra family M/s L.G/ M/s Onida being Multi-National-Companies. In no way they can be considered under the Term “Related” as per Section- 4 (3) (b) of Central Excise Act. The Transactions between M/s VPIPL with M/s L.G/M/s Onida are on Principal-to-Principal basis and the price charged for sale of Plastic-Molded-Components to M/s LG/M/s Onida is the sole consideration of the Sale. They are not covered also by the expression “Related” as defined under Section – 4 (3) (b) of the Central Excise Act. Accordingly, the provision of Section 4(3)(b) (iv) of the Central Excise Act cannot be invoked in the present case. The demand confirmed along with interest and penalty imposed on M/s VPIPL needs to be set aside - as the case is decided on merits, the another plea of time bar is not discussed. Appeal allowed - decided in favor of appellant.
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