2025-VIL-389-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Valuation of goods cleared to Inter-connected Undertaking, Related Persons - Department found that for the purpose of income tax, the appellants had shown M/s Shree Vaishnav Ispat Private Limited as their associated company. However, the appellants failed to pay central excise duty at the rate of 110% on the clearance of 'Misrolls' to their associated company – Appellant contention that valuation of goods cleared to Inter-connected Undertaking would be covered under Rule 10 of Central Excise Valuation Rules of 2000 - Whether the clearance of excisable goods by the appellants to an 'inter-connected undertaking' is to be done under Rule 8 & 9 of the Central Excise Valuation (Determination of price of Excisable Goods) Rules, 2000 or under Rule 10 of the Valuation Rules – HELD - There is no provision under which name of a legal person under the Income Tax Act, would enable such persons to be treated as ‘related person’ under the Central Excise law - In the absence of specific determination of the relationship between the appellants and the interconnected undertaking, being related to each other in terms of Section 4(3) of the Central Excise Act, 1944, there is no merit in the impugned order insofar as it has treated the transaction between these two, as related party transaction - Mere mention of the name of M/s Shree Vaishnav Ispat Pvt Ltd as an associated company in the income tax return does not make them 'related persons' under the Central Excise Act - in the absence of evidence to establish the relationship between the appellants and their inter-connected undertaking as prescribed under Section 4(3)(b) of the CEA, 1944 the transaction value cannot be rejected and the valuation should be done as per Rule 10 of the Central Excise Valuation Rules, 2000 - the impugned order is set aside and the appeal is allowed
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