Common directorship is not enough to treat parties as related persons for valuation under excise law.

Common directorship alone does not establish that a buyer and seller are related persons for excise valuation purposes; the decisive test is whether there is mutual interest in each other's business. In the absence of such mutual business interest, transaction value must be accepted and valuation under Rule 9 is not justified. Applying that principle, the departmental presumption based only on common management was insufficient, and the duty demand could not be sustained on the facts found.

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Issues: Whether goods sold by the assessee to another company having a common director could be treated as sales to a related person so as to justify valuation under Rule 9 and consequent demand of duty.

Analysis: Common directorship by itself does not establish that the buyer and seller are related persons. The relevant test is whether there is mutual interest in the business of each other. In the absence of such mutual business interest, transaction value is to be accepted and Rule 9 of the valuation rules does not apply. Following the earlier decision relied upon, the departmental presumption based only on common management was not sufficient to sustain the demand.

Conclusion: The assessee was not liable to be treated as dealing with a related person on the facts found, and the duty demand based on Rule 9 valuation could not be sustained.

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