TMI Blog2007 (3) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... any Construction Pvt. Ltd. [M/s. KCCL, for short], who used the pipes as part of execution of a Water Supply Project of the Tamilnadu Water Supply and Drainage Board [TWAD Board, for short], an agency of the Tamilnadu State Govt. The contract secured by M/s. KCCL from TWAD Board was in the nature of a turn-key contract and, upon securing the contract they had placed orders with M/s. KCIL for supply of pipes at rates agreed between them. Duty of excise was paid on such pipes by M/s. KCIL for the aforesaid period on the basis of the transaction value. After investigations, DGCEI issued a show-cause notice dated 16-1-2006 to M/s. KCIL demanding differential duty of Rs. 1,52,26,312/- along with education cess of Rs. 1,17,609/- from them in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bid. Hence the present appeal. 2. After examining the records and hearing both sides, we find that it is not in dispute that the assessee (M/s. KCIL) and their buyer (M/s. KCCL) are interconnected undertakings in terms of Section 4(3)(b)(i) of the Central Excise Act. Learned Commissioner found them to be related persons in terms of Section 4(3)(b)(iv) of the Act also on account of the fact that the assessee had received interest-free advance of Rs. 7.20 crores from the buyer. Learned Commissioner also noted that the interest-free advance of Rs. 7.20 crores outstanding as on 31-3-2003 [prior to the period of dispute] had come down to Rs. 24.00 lakhs as on 31-3-2004. Nevertheless, payment of interest-free advance to the assessee by thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CL sold the goods to TWAD Board under the said contract and accordingly ruled out the applicability of Rule 8 of the Valuation Rules. In other words, the adjudicating authority chose to go by the main part of Rule 9. The appellants would contend that the main part of Rule 9 was not applicable as the assessee was not related to their buyer (Ms. KCCL) in terms of sub-clause (ii), (iii) or (iv) of clause (b) of sub-section (3) of Section 4 of the Act. According to them, as the relation between the assessee and their buyer was only on account of their being interconnected undertakings as defined under sub-clause (i) of clause (b) of sub-section (3) of Section 4, only Rule 10 of the Valuation Rules would get attracted, provided the condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or subsidiary company of the assessee, then the value shall be determined in the manner prescribed in rule 9. Explanation. - In this clause holding company and subsidiary company shall have the same meanings as in the Companies Act, 1956 (1 of 1956). (b) In any other case, the value shall be determined as if they are not related persons for the purpose of sub-section (1) of Section 4. We find that the Revenue has no case that the assessee was related to their buyer in terms of sub-clause (ii) or sub-clause (iii) of clause (b) of sub-section (3) of Section 4 of the Act. We have already found that the assessee cannot be held to be related to their buyer in terms of sub-clause (iv) of clause (b) of sub-section (3) of Section 4. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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