2026-VIL-304-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Determining the transaction value under Section 4 of the Central Excise Act, 1994 - Revenue found that the appellant had sold its entire production to a single buyer at lower than the cost of production - Revenue concluded that the value declared by the appellant is not the transaction value under Section 4 of the Central Excise Act, 1994 and the value needs to be re-determined under Rule 11 of the Central Excise Valuation Rules, 2010 - Whether the buyers are "related persons" within the meaning of Section 4(3)(b) of the Central Excise Act, 1994 and, therefore, the transaction value declared by the appellant is not the proper – HELD - Revenue has not clearly brought out in the impugned orders how the appellant and its buyers are related. The only allegation made by the Revenue is that the original promoters of the appellant are also the promoters of M/s Thapar Finance Ltd. and M/s Hindustan Overseas Ltd., but the Revenue did not specify who were such initial promoters. Therefore, the show cause notice is vague and without any legal backing – Further, the Revenue did not establish that the appellant and its buyers are under the same management, as required under the Monopolies and Restrictive Trade Practices Act, 1969, to be considered as "inter-connected undertakings". The appellant and its buyers are private limited companies. The Revenue has not made any efforts to arrive at the costing data of the product and has simply assumed the sale price to be the cost of production and proceeded to recover duty at 110% of such price, which is not in accordance with the law - The impugned orders are set aside and the appeal is allowed
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