2026 (1) TMI 1009 - SCH - Central Excise

Assessable value dispute over transaction value and related-person valuation affirmed as principal-to-principal; appeal dismissed, valuation method upheld

Determination of assessable value for excisable goods focused on whether transactions between related entities constituted principal-to-principal sales or ... Determination of assessable value/Transaction value - Principal-to-principal sale - Assessable value - Related person / mutuality of business interest - Valuation under reasonable means / Rule 11 - recovery of differential duty - Rule 9 valuation (sole buyer / related persons) - Rule 10A (job work valuation) - Penalty under Rule 26, Central Excise Rules, 2002 - Extended period of limitation - it was held by CESTAT that 'The transaction value entered between MFCPL and IFFL be accepted for assessment of FCPs cleared to IFFL and not the value computed under Rule 11 read with Rule 9 of CEVR, 2000, as held in the impugned Order; consequently, the demand of duty confirmed as short paid calculated on the differential value at which appellant MFCPL sold products to IFFL and the price at which IFFL sold the products to customers, during the period in question, cannot be sustained.' HELD THAT:- There are no perversity in the findings returned by Customs, Excise & Service Tax Appellate Tribunal (CESTAT) that the relationship between the parties was that of principal to principal and not of a job worker to principal. This being a finding of fact, which suffers from no perversity, the Apex Court is declined to entertain these appeals. Appeal dismissed. Issues: (i) Whether the relationship between the parties is that of principal-to-principal or that of job-worker to principal; (ii) Whether the delayed appeals (208 days) filed by the appellant can be entertained.Issue (i): Whether the relationship between the parties is that of principal-to-principal or that of job-worker to principal.Analysis: The Tribunal found on the facts that the parties were in a principal-to-principal relationship rather than a job-worker arrangement. That finding of fact was examined and no perversity was found in the Tribunal's conclusion on the record.Conclusion: The finding that the relationship is principal-to-principal is upheld; conclusion is in favour of the assessee.Issue (ii): Whether the appeals filed with a delay of 208 days can be entertained.Analysis: The appeals were considered on both delay and merits. Having examined the record, the Court declined to condone the delay and entertained the appeals only to the extent of examining merits which did not warrant interference.Conclusion: The appeals are dismissed on the ground of delay and on merits; conclusion is in favour of the assessee.Final Conclusion: The appeals are dismissed both on account of delay and on merits, sustaining the Tribunal's factual finding regarding the nature of the parties' relationship.Ratio Decidendi: An appellate court will not interfere with a Tribunal's finding of fact which is free from perversity; where such a factual finding sustains the Tribunal's conclusion on the nature of the contractual relationship, the appeal must be dismissed.