TaxTMI 
TaxTMI 
2026 (5) TMI 863
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....the appellant had been clearing around 98% of the goods viz. CCB to one M/s. Apco Concrete Blocks & Allied Products (Apco, for short) a partnership firm engaged in trading and also engaged in manufacture of similar goods. Further, it was brought to the notice of the Department that both the firms are related with common interest and business of each other with one Shri Franklyn Abraham is the common partner in both the firms. Therefore, it is alleged that they are related to each other in terms of Section 4(3) of the Central Excise Act, 1944 (CEA, 1944 for short) and the transaction value at which the manufactured goods are sold by the appellant to Apco be ignored and the price at which goods are sold by Apco be considered as the price for determination of assessable value, demand notice was issued to the appellant for recovery of the differential duty of Rs.48,28,041/- for the period from July 2012 to March 2014. On adjudication, the demands were confirmed with interest and penalty. Aggrieved by the said order, they filed appeal before the learned Commissioner(Appeals) who in turn remanded the matter to the adjudicating authority for recomputation of the demand on the basis of obs....
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....ccordingly, the price at which goods sold to Apco was disputed by the Department. He has submitted that in the show-cause notices as well as in the impugned order except stating that Mr. Franklyn Abrahm is a common partner in both the firms and no other evidence has been brought on record to establish that both the firms fall under the scope 'related person' and have mutual interest in each other's business. He has argued that mutuality of interest has not been established except placing reliance on the partnership deed. No financial flow back or any other ingredients of the definition of 'related person' to establish mutuality of interest in the business of each other has been brought on record. It is his contention that the show-cause notice has not brought out any evidence to show that provisions of Section 4(3)(b) of CEA, 1944 are satisfied to show that appellant and Apco are related persons; hence, they cannot be considered as related persons and Rule 11 read with Rule 9 and Rule 10 of the Central Excise Valuation Rules, 2000 (CEVR, 2000, for short) is not applicable. 3.2. He has further submitted that the present demand is for the period from July 2012 to March 2014 wherea....
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.... share each in the partnership firm during the period in question. Apco is also a partnership firm consisting of Mrs. Lata Alfred and Mr. Franklyn Abraham during the disputed period. It is alleged that since the partner Mr. Franklyn Abrahm who holds a share of 33% in Apco inherited from his father w.e.f. 01.06.2011, being the common partner and 98% of total production is sold to Apco; therefore, Apco is related to the appellant and consequently the prices at which the appellant sells the products to Apco be ignored and the prices at which the related company Apco sold to others be considered for assessable value for determination of duty. 8. On going through the impugned order, we find that without analysing and applying the principle of law laid down on the issue governing the meaning and scope of 'related person' defined under Section 4(3)(b) of CEA, 1944, the learned Commissioner(Appeals) in the impugned orders observed that since Mr. Franklyn Abraham is a common partner in both the firms viz. M/s. Neptune Industries and Apco, the dealing between these two firms are related transactions and hence the selling price of manufactured CCBs by Apco be considered as relevant for det....
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....as there was no allegation that the appellant and M/s. BIL were holding & subsidiary company. 5.7 In the amended Section 4, effective from 1-7-2000, transaction value, instead of normal sale price, has been prescribed as the basis for determination of assessable value of goods chargeable to ad valorem rate of duty. It is prescribed that on each removal of the goods, the value shall be the 'transaction value', where the goods are sold by the assessee, for delivery, at the time and place of removal, and the assessee and the buyer are not related person, and price is the sole consideration for sale. For this period also, i.e. from 1-7-2000 to 31-7-2007, the allegation of the Department is that the appellant and their buyer M/s. BIL are 'related person', accordingly, the assessable value be determined under Section 4(1)(b) read with Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. 5.8 The meaning of "related person", under the amended Section 4, more or less continued as had been in the earlier provision, except making it more elaborative than before, by providing the meaning of 'inter-connected Undertaking' in detail and few....