TaxTMI 
TaxTMI 
2016 (12) TMI 908
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....t buyers is also clearing a substantial quantity (as per Show Cause Notice approximate 80% of the goods) to one M/s. Rajaram Steel Industries to be referred as "Rajaram" in this order. On scrutiny of the records of appellant the department came to know that Shri. Rajesh Sarda and Shri. Ramswaroop Sarda are the Managing Director and Director respectively of the appellant company. Whereas Shri. Ramswaroop Sarda and Rajesh Sarda are Managing Director respectively of Rajaram. Shri. Rajaram Sarda is the son of Shri. Ramswaroop Sarda. A statement of Rajesh Sarda was recorded wherein these facts were admitted. He also further admitted that both companies are fully controlled by above said Directors and that both Shri. Rajesh Sarda and Rajaram Sard....
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....elated person in terms of Section 4(3) (b) therefore in the transaction between the related person valuation is governed by Rule 8 of Central Excise Valuation Rules, 2000, according to which the valuation will be done on cost construction method i.e. 115% of cost of manufacture therefore adjudicating authority has rightly confirmed differential duty demand on the differential value between-the valuation under Rule 8 and transaction value adopted by the respondent. He placed reliance on the judgment of Avon Scales Co. Vs. Collector of Central Excise, Delhi[1999(111) ELT 613(Tri.)] 4. Shri. Sunil Agarwal, Ld. Counsel for the respondent submits that firstly on the only basis of relation between the persons who are directors in both independen....
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....utor; or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. Explanation.-ln this clause- (i) "inter-connected undertakings" shall have the meaning assigned to it in clause (g) of section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (64 of 1969); and (ii) "relative" shall have the meaning assigned to it in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956); From the plain reading of the above section it appears that interconnected undertaking are also related person. However, as per Rule 9 of Central Excise Valuation Rules, 2000 it is clear that Rule 9 shall apply only when the goods are sold through person as specified under sub clause (ii), (iii) or ....
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....mpany or subsidiary company of the assessee. It was made further clear that while dealing with transaction between interconnected undertaking, if the relationship as described in clause (ii), (iii) or (iv) does not exist and buyer also not holding or subsidiary then for assessment purpose they will not be considered related. In view of above clear position as regard transaction between interconnected undertakings, it is crystal clear that in existing status of interconnected undertaking they should fall under the category of sub clause (ii), (iii) or (iv) of Section of 4(3)(b). In the present case Revenue contended that the respondent and buyers company are interconnected undertaking therefore they are related and consequently proposed rule....