2019 (3) TMI 1224

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....y of differential duty of Rs. 19,72,330 and Rs. 85,21,145, along with appropriate interest under section 11AB of Central Excise Act, 1944, on clearance of excisable goods effected by M/s United Industries and M/s Shreem Engineering Industries and imposing penalties under section 11A of Central Excise Act, 1944 on the two entities and on S/Shri Vikas Jagdale, Vishal Jagdale and SR Jagdale under rule 26 of Central Excise Rules, 1944. As the appeals emanate from the same order, we dispose off all five by this common order. 2. Learned Counsel for the appellant submits that the core of dispute is the valuation of goods cleared by the assessees to M/s Shreem Capacitors Pvt Ltd who, according to the central excise authorities, are related withi....

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....ance was placed on a judicially determined interpretation for fastening the duty liability. 5. From the show cause notice, and the adjudication order, it would appear that the appellants had been discharging duty liability on their clearances by adopting the transaction value. The impugned order has held that the decision of the Hon'ble Supreme Court in re ITEC (P) Ltd has laid down the manner in which companies can be associated with one other to enable invoking of rule 9 Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 to subject goods to enhanced value and consequent differential duty on the consideration earned by the buyer, M/s Shreem Capacitors Pvt Ltd, from its customers. It is also clear from the i....

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.... form the assessable value for the goods sold to the related party also.' and though contested by Revenue that '8. ...... in the present case about 97% of the goods were being sold only through its subsidiary. Therefore, the rejection of the sale price of a negligible quantity (2-3%) sold to wholesale dealers cannot be faulted.' and, after taking note of the erstwhile and amended Rules, held that '9. In the present case, the assessee is selling part of the goods to unrelated dealers and part of the goods through a related person. Central Excise Law contains special provisions in relation to the valuation of goods sold to or through related persons prior to the introduction of new provisions in 1-7-2000 and thereafter. However, t....

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.... even in respect of the sales to related persons. The reason for this is that in terms of provisions of Section 4(1)(a), as the same stood during the period of dispute, when the goods manufactured by an assessee attracted duty at an ad valorem rate, the value of the goods for the assessment of duty was deemed to be the "normal price" which was defined as the price at which such goods are ordinarily sold by the assessee to the buyer in course of the wholesale trade for delivery at the time and place of removal, where the buyer is not related person and price is the sole consideration for sale. When such a price was available, it is that price which would be the assessment value and only in a situation where the entire sales are generally to ....