2020 (3) TMI 1184

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....uring the period from April'2008 to December'2008, the appellant had cleared their products to buyers by adopting transaction value for the goods. The department was of the view that as the buyers are related persons appellant has wrongly adopted transaction value and they ought to have arrived assessable value by adopting 110% of the cost of production of such goods as per CAS-4 as envisaged in Rule 10 (a) read with Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Two Show Cause Notices were issued for the period 04/2008 to 07/2008 and 08/2008 to 12/2008, proposing to demand the short paid Central Excise duty along with interest and also for imposing penalty. After due process of law, the adju....

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....r Section 4 (1) (b) of CEA, 1944. For better appreciation, relevant provision in Section 4 (3) is reproduced as under:- "Section 4. Valuation of excisable goods for purposes of charging of duty of excise: ......... (3) For the purpose of this Section .......... b) persons shall be deemed to be "related" if - (i) they are inter-connected undertakings; (ii) they are relatives; (iii) amongst them the buyer is a relative and distributor of the assessee, or a sub-distributor of such distributor; or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. Explanation. - In this clause - (i) "inter-c....

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.... of one or more of the foregoing sub-clauses." The authorities below have concluded that valuation under Section 4 (1) (b) has to be adopted and not the transaction value mainly on account of the fact that the six units are inter-connected undertakings. However, from the Order-in-Original or the impugned order there is no discussion how the buyers are related persons. As per Rule 10 (a) of the Valuation Rules only if the buyers and seller are related in the manner specified under the sub-clause (ii), (iii), (iv) of Clause-(b) of Sub-section (3) of Section 4 of the Central Excise Act, 1944, the valuation as alleged in the SCNs will come into application. In the present case, apart from the units being inter-connected undertakings there is....