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TMI Blog2018 (10) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... Tariff Act, 1985. The appellants were clearing goods to various buyers including to one M/s. Tubas Wire and Conductors Pvt. Limited (M/s. Tubas for short). He pointed out that Revenue issued show cause notice alleging that the said M/s. Tubas are related person. The 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. The show cause notice examines Rule 9, 10 and 11 of Central Excise (Valuation Determination of Price of Excisable Goods) Rules, 2000. Finally the show cause notice, in terms of Rule 11 of the said Rules, adopting the best judgment determined the assessable value as the price of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the independent buyers purchasing the similar quantities of goods from the appellant. He pointed out that quantity discount is a recognized trade practice and is eligible discount under the Central Excise. He argued that difference in price can be attributable to the quantity purchased by M/s. Tubas. He relied on the decision in the case of SACI Allied Products Limited vs. CCE - 2005 (183) ELT 225 (SC) to assert that even in the case of related person, the price offered to similar class of wires can be taken as comparable price. 4. Ld. AR for the Revenue relied on the impugned order. He argued that, from the fact that the appellant and M/s. Tubas are related and are family members and there is mutuality of interest in the business of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to clause (b) of sub Section 1 of Section 4 of Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The meaning of term "relative" has been defined under Section 6 of the Companies Act, 1956. According to which "a person shall be deemed to be a relative of other if, and only if :- (a) they are member of a Hindu undivided family; or (b) they are husband or wife; or (c) the one is related to the other in the manner indicated in schedule 1A. Further, it appears that the relationship between M/s. K.R. Metals and M/s. Tubas Wire and Conductors Pvt. Limited, Daman are very well covered under schedule 1A of the Section 6 of the Companies Act, 1956." We do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (183) ELT 225 (SC), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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