TMI Blog2023 (8) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, transaction value in respect of sales to unrelated buyers cannot be adopted for sales to related buyers since as per Section 4(1) transaction value is to be determined for each removal. It is observed that the adjudicating authority has wrongly interpreted the Board Circular. As per the Circular, when there is independent sale along with sale to related persons , Rule 9 is not applicable and recourse will have to be taken to the residuary Rule 11. As per the best judgment method under Rule 11, the value of the goods sold to the independent buyer should be the value for the sale to related persons also - This view has been taken by the Hon ble Apex Court in the case of Commissioner of Central Excise Service Tax, Rohtak Vs. Meri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices were adjudicated vide Order-in-Original dated 18.11.2008 confirming the demands along with interest and equal amount of duty as penalty under Section 11AC of the CEA, 1944. 5. Aggrieved against the impugned order, the Appellant filed an appeal before CESTAT. The CESTAT vide order dated 01.02.2010 remanded the matter for de novo adjudication to verify the documents produced by the Appellant before the Tribunal regarding the sale of similar goods to independent buyers at the same price at which the Appellant sold it to TWL and to decide afresh the issue of related person and other issues. 6. The Ld. Commissioner in his denovo adjudication order dated 06.08.2010 confirmed the demands again by relying on the CBEC Circular and st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich they have sold the said goods to the Indian Railways and other customers. They were not selling the goods to TWL solely. Rule 9 of the Valuation rules is applicable when the goods are sold only to related persons . When there is independent sale along with the sale to related persons , Rule 9 is not applicable. In such cases, the value of the goods sold to the independent buyer should be the value for the sale to related persons also. 9. In support of their contention, the Appellant cited the decisions of the Tribunal in the following cases: (i) Ispat Industries Ltd., Vs. Commissioner of Central Excise Raigad, [2007 (2009) ELT 185 (TRI-LB)] . (ii) Howrah Gases Ltd., Vs. Commissioner of Central Excise, Bolpur- 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 209)ELT 185 (Tri-LB)] and Aquamall Water Solutions Ltd., Vs. Commissioner reported in [2003 (153) ELT 428 (Tri)] cited by the Appellant, supports the view that When there is independent sale along with sale to related persons , Rule 9 is not applicable. In such cases, the value of the goods sold to the independent buyer should be the value for the sale to related persons also. Hence, the differential duty confirmed in the impugned order by adopting 110% of the cost of production is not sustainable. 16. We observe that the impugned order has cited Board Circular No. 643/34/2002-CX., dated 1-7.2002 and concluded that When the goods are sold partly to related person and partly to independent buyers, there is no specific rule coverin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no reason to doubt that if a circular has been issued contrary to statutory provisions or in defiance of the interpretation of such provisions by a judicial forum, the circular in question would be stripped of any binding force. The larger question that we must answer is whether the C.B.E. C. Circular of 1-7-2002 is, at all, contrary to either the CEA or the CEVR. A close reading of Section 4 of the CEA and Rules 4, 9 and 11 of the CEVR are necessary for this exercise. Rule 4, as we have noted already, is inapplicable in this case as it addresses situations where goods are not sold at the time of removal from the factory of the manufacturer. In this case, the respondent-assessee admittedly sold the goods upon removal itself, hence Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value the Revenue finally settles upon, we do not find the circular itself to be contrary to any statutory provisions. To do so would essentially render Point No. 12 ineffective and such an outcome should, ideally, be avoided as far as possible. In fact, the Commissioner s order proceeds to determine the value of the sales made by the respondent-assessee to its sister concerns on the basis of the value of its sales to independent parties. In our considered view, this is entirely consistent with the actual intent of the Circular dated 1-7-2002, which we have already held is not in contravention with either the CEA or the CEVR . 18. In view of the above discussions and the decisions of the Hon ble Supreme Court and Tribunals cited above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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