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Shri Arun Khattar, Senior Executive, M/s. BenIon India Versus CCE, Rohtak

2016 (11) TMI 773 - CESTAT CHANDIGARH

Valuation - related party - clearance of goods to sister unit - payment of duty as per Rule 8 of the Valuation Rules, 2008 - Held that: - the appellants are clearing the goods not only to their sister unit but to independent buyers and paying duty on the clearance to their sister unit on the value at which the clearance made to independent buyers - reliance paced on the decision of the case of ISPAT INDUSTRIES LTD. Versus COMMISSIONER OF C. EX., RAIGAD [2007 (2) TMI 5 - CESTAT, MUMBAI] where it .....

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sistent and in accordance with the parent statutory provisions of Section 4 of the Central Excise Act, 1944. - Appeal allowed - decided in favor of appellant. - Appeal No. E/3260, 3295/2006-Ex(DB) and E/90/2007 - FINAL ORDER NO. 61533-61535/2016 - Dated:- 4-10-2016 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Shri. Aman proxy Counsel of the Advocate for the appellant Shri G.M. Sharma, AR for the respondent PER: ASHOK JINDAL The appellants are in appeals ag .....

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ot only to their sister unit but to independent buyers and paying duty on the clearance to their sister unit on the value at which the clearance made to independent buyers. These facts are not disputed. 4. As the appellant is clearing the goods to independent buyers, in that circumstance, we hold that the provisions of Rule 8 of the Valuation Rules, 2008 are not applicable to the facts of this case in the light of the decision of this Tribunal in the case of Steel Complex Ltd.-2004 (171) ELT 255 .....

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o determine the value of those goods as they would have been sale price, in case, they were to be sold in the course of ordinary trade and commerce. In order to achieve this, rules have stipulated several methods and guidelines like adjustment for different date of delivery (Rule 4), adjustments towards freight (Rule 5), sale price of related buyer (Rule 6). Taking 115% of the cost of production is also one such method (Rule 8). In any event adopting a measure which would yield a very unreasonab .....

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rties. There is no dispute that sale price in these transactions is the sole consideration. It also transferred part of the goods for conversion i.e. other than through sale. The present order has determined that the assessable value (would be sale price) of the goods so transferred is much higher than the price at which the appellants were selling goods in course of ordinary sale and commerce. This finding has been reached by adopting 115% of the cost of production of the goods. That the value .....

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ame norm would be wholly unreliable where manufacturer is incurring huge losses. Rules lay down reasonable means consistent with principles and general provisions of the Rules and sub-section (1) of Section 4 of the Central Excise Act for ascertaining the value of the goods. In the present case, the determining the assessable value at 115% of the cost of production was clearly unreasonable and inconsistent with the principles and general provisions of the Rules and sub-section (1) of Section 4 O .....

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