2026-VIL-646-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Rejection of transaction value in respect of clearances made to related persons and invocation of Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - The appellant effected clearances to both related parties and independent buyers. The Department rejected the transaction value on the ground of relationship and invoked Rule 9 of the Central Excise Valuation Rules, 2000 – Whether the transaction value adopted by the appellant in respect of clearances to related persons is liable to be rejected and valuation is required to be determined under Rule 9 - HELD - The mere existence of relationship is not sufficient to reject the transaction value unless it is demonstrated that the relationship has influenced the price. The adjudicating authority has failed to examine the applicability of Rules 4 to 7 in a sequential manner and has directly proceeded to invoke Rule 9, contrary to the remand directions of the Tribunal - The Department has also not provided any evidence to show that the relationship has influenced the price. Further, the appellant has demonstrated that the prices charged to related and unrelated buyers are comparable. Accordingly, the rejection of transaction value and invocation of Rule 9 are not sustainable. The impugned order is set aside and the transaction value declared by the appellant is accepted – Since the basis of valuation under Rule 9 has been set aside, the consequential demand of duty, interest and penalty cannot be sustained. Further, the issue involved is interpretational in nature, and the appellant has disclosed all relevant facts and maintained proper records. In the absence of any evidence of suppression of facts or intent to evade payment of duty, the demand is also not sustainable on this ground - The demand of duty, interest and penalty is set aside and the appeal is allowed
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