TaxTMI 
TaxTMI 
2022 (12) TMI 131
X X X X Extracts X X X X
X X X X Extracts X X X X
....t was contended by the Revenue that the value of the goods should be in terms of Rule 8 of Central Excise Valuation (determination of price of excisable goods) Rules, 2000. Accordingly, the differential duty demand is confirmed. The same was upheld by the Commissioner (Appeals) in the impugned order therefore, the present appeals. 2. Shri Amal Dave, learned Counsel appearing on behalf of the appellant, at the outset submits that the issue is no longer res-integra as in the appellant's own case the issue has been considered vide order No. A/11106-11110/2022 dated 08.09.2022. 3. Shri Prabhat K. Rameshwaram, learned Addl. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the record. We find that in the appellant's own case, in the transaction with the same buyers DCMPU, the issue has been decided vide order dated 08.09.2022. The relevant portion of the order is reproduced:- "04. We have gone through the rival submissions. We find that the primary allegation of revenue is that DCMPUs and associate members are related persons in terms of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in rule 8. Rule 10. When the assessee so arranges that the excisable goods are not sold by him except to or through an inter-connected undertaking, the value of goods shall be determined in the following manner, namely: (a) If the undertakings are so connected that they are also related in terms of sub-clause (ii) or (iii) or (iv) of clause (b) of sub-section (3) of section 4 of the Act or the buyer is a holding company or subsidiary company of the assessee, then the value shall be determined in the manner prescribed in rule 9. Explanation.-- In this clause "holding company" and "subsidiary company" shall have the same meanings as in the Companies Act, 1956 (1 of 1956). (b) in any other case, the value shall be determined as if they are not related persons for the purpose of sub- section (1) of section 4. 4.2 The issue regarding inter-connected undertaking has also been clarified by the Circular of CBEC No. MF/DR/F/354/81/2020-TRU dated 30.06.2000. In the said circular following has been clarified as under:- 23. Where goods are sold through related persons, the transaction value is not applicable. However, there is s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....trols the composition of not less than (one fourth) of the total membership of the Board of Directors of the other; or iv. if one or more directors of one such body corporate constitute, or at any time within a period of six months immediately preceding the day when the question arises as to whether such bodies corporate are under the same management, constituted (whether independently or together with relatives of such directors or the employees of the first mentioned body corporate) one - fourth of the directors of the other; or v. if the same individual or individuals belonging to a group, while holding (whether by themselves or together with their relatives) not less than (one-fourth) of the equity shares in one such body corporate also hold (whether by themselves or together with their relatives) not less than (one-fourth) of the equity shares in the other; or vi. if the (same body corporate or bodies corporate belonging to a group, holding, whether independently or along with its or their subsidiary or subsidiaries, not less than one-fourth of the equity shares) on one body corporate, also hold not less than (one-fourth) of the equity shares i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ept for the specifically named categories, namely, holding company, subsidiary company, a relative and a distributor of the assessee and any sub-distributor of such distributor, buyer was held to be related to selling assessee only if they were so associated that they have interest directly or indirectly in the business of each other. In contrast no such general condition/restriction applies for inter-connected undertakings to be "related" under new Section 4. However, a provision has been made in the new valuation rules that even if the assessee and the buyer are interconnected undertakings, the transaction value will be "rejected" only when they are "related" in the sense of any of Clauses (ii), (iii) or (iv) of sub-section 4(3)(b) or the buyer is a holding company or a subsidiary company of the assessee. In other words, while dealing with transactions between inter-connected undertakings, if the relationship as described in Clauses (ii), (iii) or (iv) does not exist and the buyer is also not a holding company or a subsidiary company, then for assessment purposes, they will not be considered related. "Transaction value" could then form the basis of valuation provided other two co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elied on the balance sheet of GCMMF reflects the financial performances of the units owned by the federation as well as by the member unions of the federation. 4.4 On the basis of the above facts, she concludes that there is mutuality of interest in the business of each other. We find that the arguments of the Commissioner are misplaced in so far as in the entire discussion, she has focused on the control that GCMMF has over the appellant and the dairies. All the bylaws cited by the Commissioner shows some kind of control of GCMMF over the member unions/dairies and on the appellant however, there is not an iota of evidence to suggest that the appellant had any control over the dairies or vice-versa. 4.5 The Commissioner has sought to distinguish the order of the Hon'ble Gujarat High Court in the case of M/s. Kaira District Co-Operative Milk Producers Union Ltd. dispute was that GCMMF was charging commission as distributor and therefore, there was only one way interest. She has argued that in the instant case since GCMMF is dealing with the financial aspects of both the appellants and the dairies, the interest becomes mutual. We find that this observation again mis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ember of the Federation, may have an interest in the Federation. However, the question would be whether the Federation has any interest in the business of the Union. Merely because the Federation purchases milk from the Union would not be sufficient for the purposes of making the Federation a related person. 5. Reliance was placed on bye-laws 23.21, 23.15 and 5.2.18 of the Federation. It was submitted under these bye-laws, the Federation could decide the pricing policy of the Union; fix the rate of service charges for manufacturing, processing or marketing and render financial, technical, administrative or other necessary assistance to the members and enter into corroboration agreements. It was submitted that these clauses clearly indicate that the Federation could exercise control over the Union. It was submitted that this was sufficient for the purposes of making the Federation a related person of the Union. We are unable to accept this submission. In our view, the High Court is right in holding that this is not sufficient for the purpose of making the Federation a related person of the Union. 6. We, therefore, see no reason to interfere with the impugned judgme....