Domestic Sale to Associated Unit

[RAM SHARMA]

Dear Expert,We are selling our goods to Our Associated Unit like other domestic customer on same price. Our associated unit selling the same goods as trading goods without availing cenvat credit and rebate claim of duty to add own profit margin. Whether any excise duty liability may be raise on difference of our price and our associated unit. Relation between both unit is as sister concern neither inter unit. Pl. advice.Thanks

AI Summary

Excise Duty Liabilities Clarified: Rule 9 of Central Excise Valuation Applies Only to Exclusive Related Party Sales. A company inquires about potential excise duty liabilities when selling goods to an associated unit at the same price as other domestic customers. The associated unit sells these goods as trading items without claiming cenvat credit or duty rebate, adding its own profit margin. The response clarifies that Rule 9 of Central Excise Valuation applies only if sales are exclusively to related parties. Since sales are to both related and unrelated parties, the transaction value can be accepted. However, if a substantial portion of sales is to related buyers, excise duty may be owed based on the market selling price.