Related Parties' Excise Duty: Siblings' Company Selling to Parents' Firm Must Value Based on Distributor's Price

CESTAT ruled on short payment of excise duty involving related parties under Section 4(3)(b) of Central Excise Act. Company directors (siblings) held 99% shares and made clearances to distributor firm owned by their parents, establishing related party relationship. Differential pricing pattern revealed mutual interest, with distributor receiving goods at lower prices. Tribunal held transaction value must be based on distributor's selling price per Rule 9 of CEVR 2000. Interest payment required on differential duty, though penalty was not imposed as department filed no cross-objection. Established principle prevents appellant from being placed in worse position upon appeal. Appeal rejected, affirming duty valuation and interest payment requirements. .....

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