2006 (7) TMI 387

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....They adopted the price of Rs. 43 per kg for DTA sale of polyester chips to M/s. Indian Organic Chemicals Ltd. (M/s. IOCL, for short) from 24-12-1994 to 30-12-1994. During the same period, their unit price of goods sold to other independent units in DTA was in the range of Rs. 55.81 to Rs. 65.89. The goods cleared to DTA were to be assessed to Central Excise Duty in terms of the provisions of the Customs (Valuation) Rules, 1988 read with Section 14 of the Customs Act by virtue of the proviso to Section 3(1) of the Central Excise Act read with Section 12 of the Customs Act. The duty on the goods sold by M/s. IOCL was on an assessable value so determined on the basis of the price of Rs. 43/- per kg (transaction value). The department, after in....

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....The price difference compared to the maximum price to unrelated buyers with that of M/s. IOCL worked out to around 25%. (7)     In spite of 30% increase in the export price i.e., from Rs. 35.70 per kg to Rs. 51.62 per kg., during December '94, the assessee continued to sell the product only at Rs. 43/- per kg., to M/s. IOCL. M/s. IOCL is treated as a favoured buyer and given a special treatment and a lower price is charged." On the above basis, the Assistant Commissioner confirmed the demand of duty and also imposed a penalty on the assessee. In the appeal preferred by the assessee against the order of the Assistant Commissioner, learned Commissioner (Appeals) found that there was no mutuality of interest between t....

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....le to valuation of the subject goods. 3. Learned Counsel for the respondents has argued in defence of the Commissioner (Appeals) order on the strength of Rule 2(2) of the Customs (Valuation) Rules, 1988. It is submitted that, as held by learned Commissioner (Appeals), though the buyer held 29% of the subscribed capital in the assessee-company, the latter did not hold any share in the former and, therefore, there was no mutuality of interest between them. 4. After examining the records and considering the submissions, we find that it is not in dispute that the assessee-company did not have any shareholding in the buyer-company. The appellant has no case that any third party directly or indirectly owned controlled or held not ....