TaxTMI 
TaxTMI 
2023 (7) TMI 880
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....M/s Lal Punj Brothers are related person in terms of Section 4 of the Central Excise Act, 1944 as they have common Directors; therefore, the valuation of the goods cleared by the appellants to the related person should be under Rule 8 of the Central Excise Valuation Rules, 2000, at the rate of 115% of the cost of production. A show-cause notice dated 30.06.2005 has been issued to the appellants and the same has been adjudicated by the Original Authority, vide Order-in-Original dated 30.09.2005, confirming a duty of Rs.5,69,009/- along with interest and equal penalty. On an appeal preferred by the appellant, Commissioner (Appeals) while upholding the confirmation of duty on the ground that the same has already been deposited, set aside the p....
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....n upheld in the case of South Asia Tyres- 2003 (152) ELT 431; there was no short payment and as such there was no need for payment of penalty and interest. 3. He further submits that the Department and the Commissioner (Appeals) have failed to show that there was mutuality of interest between the appellant and M/s Lal Punj Brothers; Department has ignored the fact that the appellants were clearing only a small portion of their products to the said inter-connected undertaking and as such, it was a principal to principal transaction; Department erred in seeking assessing the goods cleared at the rate of 115% of cost of production, invoking Rule 8,even though, it was not the case that the entire production was sold to the related person or in....
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....he related party should be, as per Rule 8 of the Central Excise Rule, 2000, at the rate of 115%. It is the case of the appellants that the Department has failed to show that both the units have mutuality of interest as per the provisions of subclause (ii), (iii) & (iv) of Rule 8/Rule 9 of Valuation Rules, 2000. We find that the argument of the appellant is acceptable. Though, the Department holds that the two units are related, they fail to show the mutuality of interest. Also, the fact that the appellants do not sell 100% of their production, to the related person, so as to invite assessment at the rate of 115% of the cost of production, is completely ignored. We find that the appellants have correctly relied the case of South Asia Tyres L....
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....on Rules are not attracted as this Rule applies only when the assessee so arranges that the excisable goods are not sold by it except to or through a person who is related in the manner specified in either of sub-clause (ii) (iii) or (iv) of Sec. 4(3)(b) of the Act and in the present case, the appellants are not related to M/s. Goodyear India Ltd. in the manner specified above. According to the appellants, they are covered by Rule 10(b), where the value shall be determined as if they are not related persons for the purpose of sub-section (1) of Section 4 of the Central Excise Act. 4. We see great force in the above submissions which stems from the language of the Rules themselves. Rules 9 & 10 are reproduced below for ease of reference: ....