Custom, Excise & Service Tax Tribunal
M/S H H Interior And Auto Components Ltd vs Cce, Delhi-Iv, Faridabad on 18 January, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
DIVISION BENCH
COURT NO.1
Appeal No. E/57477-57479/2013
[Arising out of the Order-in-Original No. 01/Commr/FBD/CX/2012-13 dated 18.02.2013 passed by the CCE (Appeals), Delhi-IV, Faridabad]
Date of Hearing/Decision: 18.01.2017
For Approval & signature:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. Devender Singh, Member (Technical)
M/s H H Interior And Auto Components Ltd.
Shri. Parvesh Soni
Shri. Rajeev Kumar Rai
Appellants
Vs.
CCE, Delhi-IV, Faridabad Respondent
Appearance:
Ms. Krati Somani, Consultant,- for the appellant Sh. G.M. Sharma, AR - for the respondent Coram:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. Devender Singh, Member (Technical) Final Order No: 60097-60099 / 2017 Per Ashok Jindal:
The appellants are in appeal against the impugned order demanding duty along with interest for the main appellant and imposing penalty on all the appellants.
2. The facts of the case are that the appellants are manufacture of car seats. The maximum production is being sold by the appellant to one M/s Krishna Maruti Ltd., who used their parts for further manufacture of seats, which are being cleared to Maruti Udyog Ltd. The proceedings were initiated against the appellant alleging that the appellants and M/s Krishna Maruti Ltd. have common directors and they are inter-connected undertakings, therefore valuation has to be done accordingly by invoking provisions of Rule 9 read with Rules 8 of the Valuation Rules, 2000. The matter was adjudicated and the demand was confirmed. The adjudicating authority holding that the appellant has cleared the goods to or through related person therefore, valuation is to be done as per Rule 8 of the valuation Rules. Against the said order, the appellant is before us.
3. The ld. Counsel for the appellant submits that without going into the other issue, it is evident from the show cause notice that maximum sale has been affected to related person M/s Krishna Maruti/ KML. The appellants are not affected 100% sale to these relates person. In that circumstances, the Rule 9 read with Rule 8 of the Central Excise Valuation Rules, 2000 are not applicable to the facts of this case, therefore, the proceedings against the appellants are not sustainable. In alternative, the ld. Counsel also contested the appellant is not related persons in terms of Section 4(3)(b) of the Central Excise, 1944. He also relied on the decision of Kinetic Motor Company ltd. vide Final Order No. 55609/2016 dated 28.11.2016.
4. On the other hand, the ld. AR reiterated the finding in the impugned order.
5. Heard both sides and considered the submissions.
6. The short issue involved in the matter is whether the provisions of Rule 9 read with Rule 8 of the Valuation Rules are applicable to the appellant when the appellant is clearing goods to independent dealer as well as to sister concern or not?
For better appropriation, Rule 9 has to be seen which is reproduced herein as under:-
Rule 9. When the assessee so arranges that the excisable goods are not sold by him except to or through a person who is related in the manner specified in either of sub-clauses (ii)(iii) or (iv) of clause (b) of sub section (3) of section 4 of the Act, the value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal, to buyers (not being related person); or where such goods are not sold to such buyers, to buyers (being related person), who sells such goods in retail:
Provided that in a case where the related person does not sell the goods but uses or consumes such goods in the production or manufacture of articles, the value shall be determined in the manner specified in Rule 8.
8. On going through the said provisions, we find that Rule 9 is applicable when all the productions made by the appellant is cleared to their sister unit or related person which is not the case here as appellants are clearing the goods to independent buyers as well as related person. Therefore, the Provisions of Rule 9 are not applicable to the facts of this case.
9. Further, we find that the same issue was taken up by this Tribunal in the case of Kinetic Motor Company ltd. (Supra). Wherein this Tribunal hold that in such situation, Rule 9 of the Valuation Rules is not applicable, therefore, we hold that the proceedings against the appellants are not warranted, therefore, the impugned order deserves no merits hence set aside.
Consequently, the appeals are allowed with consequential relief, if any.
(Dictated and pronounced in the open court)
Devender Singh Ashok Jindal
Member (Technical) Member (Judicial)
rt
1
E/57477-57479/2013
M/s H H Interior and Auto Components ltd. & others Vs. CCE, Delhi-IV