TMI Blog2019 (6) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal No. 1838, 1839 of 2010 - A/10970-10971/2019 - Dated:- 3-6-2019 - MR. RAMESH NAIR, MEMBER (JUDICIAL) And MR. RAJU, MEMBER (TECHNICAL) Sh. T. C. Nair Sh. Nitin N. Mehta, Advocate for the for the Appellant Sh. K. J. Kinariwala, Authorized Representative for the Respondent ORDER PER: RAMESH NAIR The present appeals have been filed against Order-in- Appeal No. SKSS/166 167/VAPI/2010 dated 30.08.2010 passed by Commissioner (Appeals), Vapi. 2. The brief facts of the case are that the Appellants are manufacturing plastic furniture, crate etc. They are selling some quantity of crates to on M/s Stackwell Marketing Service (SMS) and the sale constitutes 4% to 5% of the total production. They were issued show cause notice dated 19.04.2007 alleging that the duty on goods cleared to M/s SMS during the period April 2002 to March 2006 was payable on sales price of SMS in terms of Rule 9 of the Central Excise Valuation Rules since the Appellant has shown M/s SMS as their related concern/ undertaking in balance Sheets/ Financial reports. The Appellant filed reply to same cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 4 of the Central Excise Act. He relied upon the case of D.D. Industries Ltd. 2010 (251) ELT 401 that if more than 40% shares of manufacturing unit are held by the partners of distributing firms and entire shares of manufacturing are held by the relatives of directors of manufacturing unit or partners of distributing firms they are relatives. The said judgment is applicable as the Appellants and M/s SMS are relatives. The buyer and the manufacturer are related persons as per clause (i) of sub section 3 (b) of section 4 of the act. As per rule 10 of Central Excise Valuation Rules, 2000, in respect of inter-connected undertakings, the value at which buyer sells the goods can be taken as value for payment of excise duty, only if conditions as per sub clause (ii) or (iii) or (iv) of sub - section 4 of the Act are fulfilled or the buyer is a holding company or subsidiary company of the assessee. It is fact that M/s SMS are the distributors of Appellant and thus condition of clause (iii) is fulfilled. Moreover SMS is 100% subsidiary of Appellant. Therefore as per rule 10 of said rules, the duty has to be paid as per provisions of Rule 9 i.e. at the price at which M/s SMS were sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand is barred by limitation as there was no suppression or mis statement. The duty was paid on comparable prices; marketing pattern was declared and required information was filed under rule 173 C of Central Excise Rules, 1944, periodical returns were filed and the records were audited by the Central Excise officers. That in case of second show cause notice dated 18.03.2008 the demand was made for the period April 2006 to Feb 2007 which is clearly time barred. He relies upon the judgments in case of Nizam Sugar factory 2006 (197) ELT 465 (SC), ECC Industry Ltd. 2004 (164) ELT 236 (SC), Hyderabad Polymers 2004 (164) ELT 151 (SC), P B Pharmaceuticals 2003 (153) ELT 14 (SC). 4. Ld. AR Sh. K.J. Kinariwala appearing for the revenue submits that since M/s SMS and the Appellant are related person, the demand is sustainable. He also reiterates the findings of the impugned order. 5. Heard both the sides and perused the records. We find that earlier twice the matter was remanded by the Commissioner (Appeals) on the ground that the said orders were passed beyond the scope of show cause notice and also that Section 4 (3) (b) clause (ii) and (iii) are not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not have re-visited and nullified his own above findings and only the limited scope left to be examined as whether the sub clause (i) is applicable. Clearly the Order-in-appeal travels beyond his own categorical findings which had attained finality. Further in earlier round of proceedings the adjudication orders were twice set aside on the ground of having been passed beyond the show cause notice. The Appellate Authority has himself travelled beyond the scope of show cause notice. The show cause notice only invoked provisions of Section 4 (3) (b) (ii), (iii) and (iv). The clause (i) was never invoked in show cause notice and the adjudication order as well as Appellate order never examined sub clause (iv). Hence the order-in-appeal is not sustainable on this ground. Otherwise also we find that provisions of Rule 9 of Central Excise Valuations Rules invoked in the impugned order in no way affects the valuation if the person is related person. It states as under: Rule 9. When the assessee so arranges that the excisable goods are not sold by an asseessee except to or through a person who is related in the manner specified in either of sub clauses (ii), (iii) or ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there is difference between the prices and the goods were cleared to M/s SMS at lower prices. However on perusal of same we find that the comparison has been made by him between prices of different models whereas the prices should have been compared of the same models of crates. The raw material used by the Appellant is polymers and the prices of same keeps on fluctuating. The sale prices to be compared should be of clearances made at same point of time. The Appellate authority has compared the prices of different models at different dates which are not correct. We find that Appellant has produced invoice No. Invoice no. 3626 dated 11.08.2005 issued for model CC- 654315C red @ ₹ 263.93 to M/s SMS and on the same day the same model has been sold @ ₹ 256.24 to Marine Exports, Goa. In case of invoice no. 2620 dated 30.06.2004 and no. 4924 dated 19.09.2004 the comparison was not correctly made. Invoice no. 2620 was issued for crate model no. JR-53300LW @ 86.20 to M/s SMS and same model was sold on same day vide invoice no. 2622 to others @ 86.20. In case of invoice no. 4924 dated 19.09.2004 model no. JR 53300BJ Orange was sold to independent buyer @ ₹ 120.36 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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