TaxTMI 
TaxTMI 
TaxTMI 
2002 (3) TMI 155
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....ell their products to M/s. Eureka Forbes Ltd. who are their holding company for marketing. The respondents are subsidiary company of the appellants as per the meaning assigned to them under the Companies Act, 1956. Both these companies are related persons for the purpose of assessment of goods manufactured and sold by them to the holding Company. The goods were removed by the respondents from their factory at Hyderabad to their depots on "stock transfer" basis for convenient distribution and delivery to the holding Company viz. M/s. Eureka Forbes Ltd. These goods are sold to M/s. Eureka Forbes Ltd. at the appellants' depot and delivered to them. The selling price at the depot is not the normal price because it is a sale to related person. Cost of Transportation from the factory gate to the depots is incurred by the appellants. There is no normal price either at the factory gate or at the depot. The selling price of the holding company viz. M/s. Eureka Forbes Ltd. is the basis for arriving at the assessable value of the goods as per provision (iii) of Section 4(1)(a) of the C.E. Act, 1944. This is the deemed normal price of the goods at the factory gate when the goods are removed fr....
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.... it is to be noted that the Board in its Circular No. 251/85/96-CX, dated 14-10-96, has clarified the implication of amended Section 4, which came into force with effect from 28-9-96. The following clarifications are relevant for the issue under consideration doubt : Whether transport cost from factory gate to the other places of removal such as depots etc. will form part of the assessable value, particularly when no amendment has been made in Section 4(2) of Central Excise Act, 1944. Answer : In view of the change in definition of place of removal, sale price at the place of removal such as depot etc. has to be taken as normal sale price for determination of assessable value. A sale price at any place of removal other than factory gate has to take into account all the expenses incurred towards transport including freight, insurance, etc. from the factory gate to such place of removal and other expenses incurred in maintaining and running the said place of removal and thus all these expenses will form part of the sale price for determination of the assessable value. The above clarification from the Board clearly reinforces the appellant's contention that where there is normal pri....
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.... The goods are sold through their depots situated all over India as well as through M/s. Eureka Forbes Limited (hereinafter referred to as M/s. EFL), who are the related persons of the assessee. In respect of the sales through the related persons, the assessee claimed abatement on account of freight and insurance from the factory gate to the place of removal and towards octroi. In order-in-original Nos. 4/99, dated 22-2-99, 45/98, dated 30-10-98 and 5/99, dated 22-2-99, the Assistant Commissioner of Central Excise, Hyderabad-IX division disallowed the deductions claimed and demanded the duty short-paid during the period from April, 1997 to October, 1998. When the assessee went in appeal, the Commissioner of Customs & Central Excise (Appeals), Hyderabad set aside the orders-in-original passed by the Assistant Commissioner of Central Excise, Hyderabad-IX Division and allowed the appeals with consequential relief to the appellants. 2. On examination of the order-in-appeal Nos. 280 to 282/2000 (H-III) C.E., dated 17-11-2000 passed by the Commissioner of Customs & Excise (Appeals), Hyderabad, it is found by the undersigned that the said orders-in-appeal are not legal and proper f....
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....the Central Excise Act, 1944 where the goods are sold through related person, the normal price of the goods sold by the assessee through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons), or where such goods are not sold to such dealers, to dealers (being related person), who sell such goods in retail. Thus, the price at which the goods are sold by the related person, shall be the basis for assessment. 3. In view of the above, in respect of sales through the related person, the assessee is not entitled for abatement on account of freight and insurance from the factory gate to the place of delivery. 4. The Hon'ble CEGAT may kindly consider the above points and set aside the order-in-appeal Nos. 280 to 282/2000 (H-III) C.E., dated 17-11-2000 passed by the Commissioner of Customs & Central Excise (Appeals), Hyderabad." 6. Shri G.S. Menon, learned SDR appearing on behalf of the Department reiterated the grounds taken in the appeal and sought for setting aside the orders-in-appeal and allowing the Revenue appeal. 7. The learned C....