Related-person valuation turns on total control, shareholding, and business ties, with corporate veil scrutiny where facts warrant.

Related-person status for excise valuation cannot be determined by reciprocal shareholding alone; authorities must examine the totality of control, common directors, actual shareholding pattern, and the business relationship between the entities to decide whether mutuality of interest exists. Where the facts suggest common control or substantial common ownership, the corporate veil may be lifted to identify the real controlling persons. On the existing record, the absence of established mutuality of interest was not treated as final, and the valuation issue required fresh factual reconsideration with a hearing to the assessee.

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Issues: (i) Whether the buyer and seller were related persons with mutuality of interest so as to attract valuation under the related-person provisions and the price-rules governing clearances to connected entities.

Analysis: The determination of related-person status could not rest on a narrow requirement of reciprocal shareholding alone. Where common directors, common control, and substantial common shareholding were alleged, the authorities were required to examine the actual shareholding pattern, the persons in control of management, and whether the corporate veil had to be lifted to identify the real controlling persons. The existence of mutuality of interest depends on facts and circumstances and may be inferred only after proper factual ascertainment, including the business relationship between the entities and the applicability of the relevant valuation provisions.

Conclusion: The finding that mutuality of interest was not established on the existing record could not be sustained as a final determination; the matter required reconsideration on the factual basis.

Final Conclusion: The valuation dispute was sent back for fresh examination of the relationship between the entities and the applicable duty valuation provision, with opportunity of hearing to the assessee.

Ratio Decidendi: Related-person status and mutuality of interest for excise valuation must be determined on the totality of control, shareholding, and business relationship, and may justify lifting the corporate veil where the facts so require.

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