Interconnected undertakings alone do not establish related-person status for excise valuation under Rule 10.

Interconnected undertakings are not automatically related persons for central excise valuation under Rule 10. The rule applies only if the buyer also satisfies the related-person conditions in Section 4(3)(b) of the Central Excise Act, such as a holding-subsidiary relationship or mutual interest in each other's business. As the record showed no allegation or evidence of mutuality of interest, and no basis to treat the buyer as the assessee's holding or subsidiary company, mere interconnection was insufficient to reject transaction value. The duty demand based on Rule 10 valuation was therefore unsustainable.

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Issues: Whether the buyer and the assessee could be treated as related persons for valuation under Rule 10 of the Central Excise Valuation Rules, 2000 merely because they were interconnected undertakings within the meaning of Section 2(41) of the Companies Act, 1956.

Analysis: The valuation scheme under Rule 10 does not permit automatic treatment of interconnected undertakings as related persons. For Rule 10 to apply, it must also be shown that the buyer falls within the related-person categories under Section 4(3)(b) of the Central Excise Act, 1944, including a holding-subsidiary relationship or a connection involving interest, direct or indirect, in each other's business. The record disclosed no allegation or evidence of mutuality of interest, nor any basis to show that the buyer was a holding company or subsidiary company of the assessee. Mere interconnection, without satisfaction of the further statutory conditions, was insufficient to disturb the transaction value.

Conclusion: The buyer and the assessee could not be treated as related persons, and the duty demand based on valuation under Rule 10 was unsustainable.

Ratio Decidendi: Interconnected undertakings are not ipso facto related persons for central excise valuation; Rule 10 applies only when the additional statutory requirements for related-person status under Section 4(3)(b) are also established.

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