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2023 (9) TMI 1373 - CESTAT NEW DELHIMethod of Valuation - Related party transaction - Sale to inter-connected undertakings for the period prior to 01.03.2013 - applicability of rule 11 of the Valuation Rules read with rule 4 and rule 2 (b) - case of the Revenue is that the duty should have been paid on the price at which the appellant had sold the goods to independent buyers in the greatest aggregate quantity. HELD THAT:- In the impugned order, and the OIO the value was determined as per Rule 11 read with Rule 4. We find that Rule 11 can be applied only when the situation is not covered by any of the previous valuation rules. It is undisputed that the appellant and JSPL and JPL are related persons. Therefore, it must be examined if they can be covered by Rule 10 (a) or Rule 10(b) - If the appellant and JSPL an JPL were related persons only because they were interconnected undertakings and they were not also related in any of the other three ways [clauses (i) (ii) or (iv) of clause (b) of sub-section (iii) of Section 4] or the appellant and JSPL or JPL are the holding or subsidiary companies of each other, then valuation should be done as if they are not related persons. In this case, there is no allegation or evidence that JSPL and JPL are connected to the appellant in any of the other three ways. There is no allegation that the appellant is either the holding or the subsidiary company of either JSPL or JPL. The only allegation is that they are associated companies and hence they are interconnected undertakings. It has also been alleged that JPL is the subsidiary of the JSPL, i.e., one of the buyers is the subsidiary of another buyer. Therefore, this case falls squarely under section 10 (a) of the Valuation Rules and duty was required to be paid as if the appellant and JSPL and JPL were not related persons, i.e., on the transaction value. The demand of duty under Rule 11 of Valuation Rules cannot, therefore, be sustained and needs to be set aside - impugned order set aside - appeal allowed.
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