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2018 (10) TMI 636 - AT - Central ExciseValuation - related person or not - Revenue’s allegation is based on the assertion that the whole capital of M/s. Tubes was contributed by the family members of Shri Kapil Dabharia and that he is also the proprietor of M/s. K.R. Metals - Rule 11 of Central Excise (Valuation Determination of Price of Excisable Goods) Rules, 2000. Held that:- Only the specified persons are the qualified to be relative - In the instant case, while the appellant-assessee is a proprietorship concern and M/s. Tubas is a Private Limited company. The Section 6 of the Companies Act, 1956 would not cover such a situation. In these circumstances, the basic charge in the show cause notice fails and thus, the demand made on the basis of this charge cannot be sustained. Moreover, it is seen that even if two are held to be related, in terms of the decision of Hon'ble Apex Court in the case of SACI Allied Products Limited vs. CCE [2005 (4) TMI 65 - SUPREME COURT OF INDIA], the value to be adopted should be of the goods cleared to same class of buyers - In the instant case, M/s. Tubas is buying substantial quantity of the total sale of the appellant. Since M/s. Tubas is buying 20/30% of the appellant’s production, the price to any independent buyer of similar quantity only can be adopted under Rule 11 of the Central Excise (Valuation Determination of Price of Excisable Goods) Rules, 2000. On this count also, the demand dose not survive as the price adopted does not related to similar class of buyer. Appeal allowed - decided in favor of appellant.
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