For the valuation of excisable goods, if parties are 'interconnected undertakings' under Section 4(3)(b)(i) of the Central Excise Act, 1944, Rule 10(b) of the Valuation Rules, 2000 applies instead of Rule 9, treating them as unrelated persons for valuation purposes.

Per: S.K. MOHANTY

Applicants/Appellants have filed this miscellaneous application, praying for amendment to the cause title in the appeal filed by them. It has been stated that the respondent’s name and address in the appeal memorandum as ‘The Commissioner of CGST and Central Excise, Belapur, may be changed and to be read as “Commissioner of Central Goods and Service Tax, Raigad”, having office at Plot No. 1, Sector-17, Khandeshwar, New Panvel- 410 206, consequent to change in the jurisdiction of such adjudicating authority. Prayer made by the appellants is considered and accordingly, the changed name and jurisdiction of the respondent has been incorporated in the appeal records. Miscellaneous application is disposed of.

2. Briefly stated, the facts of the case are that the appellant is engaged inter alia, in the manufacture of Oxygen/Nitrogen/Acetylene/ Nitrous Oxide plants, Liquid Oxygen Pumps etc., falling under Chapter 84 of the First Schedule to the Central Excise Tariff Act, 1985. During the period in dispute, the appellants had cleared those final products to the related parties viz., Sanghi Overseas (Merchant Exporter), Vitesse Pvt. Ltd., Sanghi Udyog Pvt. Ltd. and Geldhof Pvt. Ltd. The appellants had also sold the said final product to the independent buyers. The appellant had claimed that the supplies made to the related parties (interconnected undertakings), should fall within the purview of Section 4(3)(b) of the Central Excise Act, 1944, for valuation of the excisable goods. The department had also accepted that the buyers named above are the related party to the appellants. The department had applied Rule 9 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 for determining the assessable value for the purpose of payment of duty by the appellants. However, the appellants had contested that their case should fall under the scope and purview of Rule 10 (b) of the Rules of 2000 and on the basis of such rule, they had appropriately discharged the Central Excise duty liability. The appellants had also contended that in respect of the supplies made to Sanghi Overseas, no Central Excise Duty was paid while removing the goods from the factory inasmuch as the said goods were removed under bond for export. The contentions made by the appellant were not accepted by the department and accordingly, show cause proceedings were initiated, seeking confirmation of the differential Central Excise duty. The matter arising out of the show cause notices dated 06.02.2013 and 11.11.2013 were adjudicated vide order dated 06.03.2015, wherein the adjudicating authority had confirmed the differential Central Excise duty demand along with interest and also imposed penalty on the appellants. The appeal against the said adjudication order dated 06.03.2015 was upheld by the learned Commissioner (Appeals) vide the impugned order dated 13.01.2016. Feeling aggrieved with the impugned order, the appellants have preferred this appeal before the Tribunal.

3. Learned Advocate appearing for the appellants submitted that since the appellants and the buyers of the goods are related being interconnected undertaking, their case should fall under the purview of clause (i) of Section 4(3)(b). Thus, he submitted that provisions of Rule 9 shall not be applicable in the case of the appellants inasmuch as the clause (i) in Section 4(3)(b) is not finding place in the said rule for determination of the value. He submitted that the case of the appellant squarely falls under Rule 10(b) of the Rules of 2000 and since the Central Excise duty liability was discharged by the appellants under the said Rule, the differential duty confirmed by the authorities below cannot be sustained. To substantiate the stand that the case of the appellants should fall under the scope of Rule 10(b) of the Rules of 2000, Learned Advocate has relied upon the order passed by the Co- ordinate bench of the Tribunal, in the case of South Asia Tyres