TMI Blog2018 (10) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 4(3)(b)(ii) of the Central Excise Act, 1944. Applicability of Rule 9 of Central Excise Valuation Rules, 2000 - Held that:- Admittedly, whole of the goods are not sold by the M/s Hindustan through M/s Malkoh. In fact, M/s Hindustan is selling goods to Government Department as well as for exports. In that circumstances, the provisions of Rule 9 of Central Excise Valuation Rules, 2000, are not applicable to the facts of this case. Therefore, on that ground also, the charge of Revenue of under valuation is not sustainable. Thus, the appellant are not related persons in terms of section 4(3)(b)(ii) of Central Excise Act,1944 and provisions of Rule 9 of the Central Excise Valuation Rules, 2000, are not applicable to the facts of this case, therefore, the impugned orders are not sustainable in the eyes of law - appeal allowed - decided in favor of appellant. - Appeal No. E/291,489,490,491/2010, E/1031-1032/2009, E/375/2011 - 63235-63241/2018 - Dated:- 5-10-2018 - Mr. Ashok Jindal, Member (Judicial) And Mr. Bijay Kumar, Member (Technical) For the Appellant : Shri. A.K. Prasad-Advocate For the Respondent : Shri. Tarun Kumar-AR. ORDER PER ASHOK JINDAL: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors in M/s Malkoh. The remaining two Directors in the M/s Malkoh firm are Shri. Vinay Kohli and Shri. Rajiv Malhotra, who are the most active partners of M/s Hindustan. It was, therefore, assumed that both the firms i.e. M/s Malkoh and M/s Hindustan are related as per Schedule 1-A to the clause (c) of Section 6 of the Companies Act, 1956 and as per Section 4(3)(b) of the Central Excise Act, 1944 therefore, it was alleged that the partners/directors of these above two firms belongs to the same two families who are having mutuality of interest in the business of each other and it was also alleged that payment of ₹ 65 Lacs was made by M/s Malkoh to the manufacturing firm M/s Hindustan in the guise of franchisee charges, retention of security deposits of dealers by the manufacturing firm M/s Hindustan and ₹ 20,37,824/- and ₹ 14,20,692/- paid by the M/s Malkoh on advertisement, attracting sub clause (ii) and (iv) of the clause (b) of the sub Section (3) of Section 4 of the Act, therefore, duty was to be demanded for the period 2003-2004 and 2005-2006. It was also alleged that both the firms were covered as relative as provided under sub clause (ii) of clause (b) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s Hindustan and M/s Malkoh and the directions were holding share to the extent of 15% each in their individual capacity. Father of both Shri. Vijay Kohli and Shri. Vinay Kohli on the one hand and Shri. Rajiv Malhotra and Shri. Anil Malhotra were having shareholder of 35% each in the company of M/s Malkoh which they have holding in their individual capacity. Therefore, they cannot be related person. He further submits that the provisions of Rule 9 of Central Excise Valuation Rules,2000, is not applicable, as this Rule could be applied only where the entire goods are sold through so called related person. But in the present case, the entire clearances were not made through M/s Malkoh but the M/s Hindustan was directly selling the goods to Government Departments and also selling for exports. It is reiterated that the provisions of Rule 9 are applicable only when the manufacturer so arranges that the excisable goods are not sold by an assessee except to or through a person who is related manner specified in either of sub clauses (ii), (iii) or (iv) of clause (b) of sub section (3) of section (4) of the Act, the value of the goods shall be the normal transaction value at which thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a sub-distributor of such distributor; or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. Explanation-in this clause- (i) inter connected undertakings shall have the meaning assigned toit in clause (g) of Section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (64 of 1969); and (ii) relative shall have the meaning assigned to it in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956) Rule 9 of the Central Excise Valuation Rules, 2000, is extracted also herein below: Rule 9. When the assesee so arranges that the excisable goods are not sold by an assessee except to or through a person who is related in the manner specified in either of sub-clauses (ii),(iii) or (iv) of clause (b) of sub-section (3) of Section 4 of the Act, the value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal, to buyers (not being related person); or where such goods are not sold to such buyers, to buyers (being related person), who sells such goods in retail: Further, we find that as per the Section 2(41) of the Companies Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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