TaxTMI 
TaxTMI 
2026 (3) TMI 428
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....ther units. In terms of the Explanation 1, Section 2(g) of Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, they are considered as related persons and interconnected units. Further if the Director or Manager of one body corporate is the Managing Director or Manager of other unit, it shall be deemed to be under the same management and should be treated as interconnected undertaking. Accordingly, the respondent was considered as relative as per the meaning assigned under Section 2 of the Companies Act, 1956, it is alleged that the method of valuation adopted by the Appellant is unsustainable and by invoking Rule 8 of the Central Excise Valuation (Determination of the Price of Excisable Goods) Rules, 2000 proceedings were initiated. Show cause notice No. 16/2013/CX was issued on 14.02.2013 for the period from 2009-2010 and SCN No. 87/2013 dated 31.10.2013 is issued for the period from 2010-2011 and 2011-2012. Both the show cause notices were taken up for Adjudication and after considering the issue, Adjudication authority dropped the proceedings initiated against both the SCNs. Aggrieved by said orders, Review was conducted and as per the Review order No. 01/2015 dated 04.....
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....d buyer companies are all members of same family and since they are closely associated, they have mutual interest in the business of each other. This aspect has not been looked before concluding that the units were not related in these respects. Also, the order speaks about certain financial transactions, which according to the adjudicating authority was not sufficient to prove mutuality of interest, but the details of such transactions were found to be not examined in the order. Accordingly, the order is not legal and proper. 5. The Learned Authorized Representative (AR) further submits that the relationship of the Managing Director of the respondent and the buyers. After the demise of Shri. K. P. Varkey, his son, Shri. K. V. Tolin took charge as Managing Director of the noticee company. Whereas Shri. K. V. Tolin is the proprietor of M/s. Tolin Pretreads and his mother is the Proprietrix of M/s. Toshma Rubber Products. Further, Shri. K. V. Tolin is the Managing Director of all other three companies' viz., M/s. Toja Tyres and Tread Pvt. Ltd., M/s. Tolin Tyres Pvt. Ltd., and M/s. Peejay Rubbers Pvt. Ltd. All these five units are the buyers of respondent and purchase nearly 95% of....
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....bsence of any proof or material to show that the invoice price was influenced the benefit of the Notification cannot be denied. Under these circumstances, we see no infirmity in the judgment of the Tribunal. We, thus, see no reason to interfere. The Civil Appeal stands dismissed. No order as to costs". 7. The Learned Sr. Counsel also draws our attention to the finding and submits that the Adjudication Authority have considered the question of valuation of goods in the case of clearance of manufactured goods to related buyers. Rules 9 and 10 of Central Excise Valuation (Determination of the Price of Excisable Goods) Rules, 2000 deal with situations where assessable value is required to be determined for sale to related buyers. After examining the applicability of these Rules, Adjudication Authority held that as per Rule 9 of Central Excise Valuation (Determination of the Price of Excisable Goods) Rules, 2000, when excisable goods are not sold by an assessee except to or through a related person, the value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal to buyers (not being related persons). In case where the ....
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....)(b) of the said Act or the buyer is a holding company or subsidiary company of the assessee. Further there is no allegation in the show cause notice that the buyer is a holding company or subsidiary company of the respondent who is the manufacturer and Rule 10(a) of the Valuation Rules is not applicable. 9. As regarding the applicability of Rule 10(b) of the Valuation Rules, once Rule 10 (a) being found not applicable, the only applicable rule in the case of interconnected undertakings is Rule 10(b) which reads thus: "in any other case, the value shall be determined as if they are not related persons for the purpose of sub section (I) of Section 4". 10. Thus, the relationship as alleged in show cause notice have no relation in transaction value and prices declared in the sale invoices and ER-1 returns is the assessable value for clearance of goods manufactured by the respondent. 11. Learned Sr. Counsel further submits that the Adjudication Authority also considered the value of goods as per the cost data as well as the transaction value and observed that considering the volume of transaction, the price declared is not at substantial variance with the cost of prod....