TMI Blog2004 (12) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... and the prices of the goods sold by EFL to their dealer should be adopted in the matter. The Revenue invoked provisions of Rules 9 and 10 of the Valuation Rules, 2000 to raise the differential duty for the period 1-7-2000 to 31-3-2002. The appellants contention was that Rules 9 and 10 would not be applicable to the facts of the case as Rule 9 would apply only when there is complete sale to the related person and as there were sales of more than 20% to separate dealers, the department was required to have proceeded in terms Rule 4 and should have accepted the transaction value. They contend that the proceedings on the same issue was cleared in respect of Bangalore factory and the matter had been decided by this Bench in their own case as reported in 2003 (153) E.L.T. 428. It is their contention that this judgment has been approved by the Apex Court as reported in 2003 (158) E.L.T. A182. The learned Counsel fairly submits that their prayer for deductions was rejected by the Tribunal and confirmed by the Apex Court. He contends that the Tribunal has clearly overruled the department's invocation of Rules 9 and 10 as the Show Cause Notice invoked only Rules 9 and 10 without recourse to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules. Rule 9 would apply in circumstances where the sale is explicitly made to the related person. Admittedly in the present case, the appellants are not exclusively selling the goods to the EFL but some percentage of the goods are also being sold to the dealers independently of the sales made to the related person. In this circumstance, invocation of Rules 9 and 10 in the matter is not justifiable and any order beyond the scope of Show Cause Notice would not be sustainable in terms of the judgment cited by the learned Counsel. We have considered the judgment of the Tribunal in the assessees' own case and find from the facts that they are acceptable and the issue pertaining to the sale of Aqua Guard etc. to the EFL is covered by the judgment. The findings recorded by the Tribunal in pg. 22 and 23 are re-produced herein below : "9. We have considered the submissions and find :- (a) The fact that the appellants are selling the goods to related person is not in dispute. It is also not in dispute that a substantial amount of the sale is to the related persons M/s. EFL. However sales to independent customers is also not denied and accepted in the notice itself. In this case, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the show cause notice. (iii) The wholesale price to the independent distributor of such goods is to be considered to arrive at the transaction value for related person. (iv) Penalty is not imposable in the facts and circumstances of the case. (c) Vide Para 38 of the impugned order, which has been extracted (supra), it is apparent that in the impugned order clearances of two goods, namely water coolers-cum-purifier and water purifier PG 600 clearances which are resold to independent buyers in wholesale by the related person are not taken into consideration in the demands determined. This is in compliance with the provisions of Section 4 of the Central Excise Act, 1944 and the Valuation Rules, 2000. The demands are restricted by resorting to Rule 11 read with the principles of Rules 4 and 7 of Valuation Rules, 2000 only to determine the values and thereafter the duty liability therein on such goods which are sold by the appellants to M/s. EFL, which are in turn sold by them in retail, as found herein above. The question therefore is valuation and determination of duty on such goods which are not sold at the factory gate and by the related person in wholesal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verify the genuineness of such prices and thereafter, concluded that the price satisfy the ingredients of the transaction value as per Section 4 introduced and applicable in this case. Thereafter in the subsequent Paras 34.3 to 37 he has discussed why and what abatements were necessary and concluded that the deductions arrived at by him, as recorded in Para 38 extracted (supra), were to be granted. In this view of the matter and the fact that the commercial level consideration and evidences thereto has not been adduced by the appellant before the Commissioner and or before us, we are not in a position to grant any further deductions from those arrived at by the Commissioner. Valuation under Rule 11 applicable is the "Best Judgment Assessment" of the value. It has to be based on certain logic and principles as contained in the Valuation Rules and Section 4. There is no doubt in our mind that the logic and the principles as contained in the Valuation Rules and Section 4 have not been applied in this case. In absence of any material to grant further deductions if any on basis of 'commercial level of transactions', the benefit of the same cannot flow to the appellants. The appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X
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