Custom, Excise & Service Tax Tribunal
) Sundaram Fasteners Ltd vs ) Commissioner Of C.Ex., Pondicherry on 6 January, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
1) Appeal No.E/711/05
[Arising out of Order-in-Original No.10/2005 dated 2.6.2005 passed by the Commissioner of C.Ex., Pondicherry]
2) Appeal No. E/712/05
[Arising out of Order-in-Original No.10/2005 dated 2.6.2005 passed by the Commissioner of C.Ex., Pondicherry]
3) Appeal No. E/698/07
[Arising out of Order-in-Original No.11/2007 dt. 27.6.2007 passed by the Commissioner of Central Excise, Pondicherry]
4) Appeal No.E/755/05 & E/CO/14/06
[Arising out of Order-in-Appeal No.77/2005-CE dated 8.6.2005 by CCE (A),Madurai]
5) Appeal No. E/1056/05
[Arising out of Order-in-Appeal No.204/2005-CE dt. 10.10.2005 passed by CCE (A), Madurai ]
6) Appeal No.E/865/06
[Arising out of Order-in-Original No.25/2005 dt. 16.11.2005 passed by the Commissioner of C.Ex., Chennai]
7) E/866/06 & E/CO/26/07
[Arising out of Order-in-Original No.24/2005 dt. 7.11.2005 passed by the Commissioner of C.Ex., Chennai]
For approval and signature:
Honble Ms. JYOTI BALASUNDARAM, Vice-President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
1) Sundaram Fasteners Ltd.
2) K.Srinivasalu
3) Sundaram Fasteners Ltd.
4) Commissioner of C.Ex., Madurai
5) Commissioner of C.Ex., Madurai
6) Commissioner of C.Ex., Chennai
7) Commissioner of C.Ex., Chennai
Appellant/s
Versus
1) Commissioner of C.Ex., Pondicherry
2) Commissioner of C.Ex., Pondicherry
3) Commissioner of C.Ex., Pondicherry
4) Sundaram Fasteners Ltd.
5) Sundaram Fasteners Ltd.
6) TVS Autolec Ltd.
7) Sundaram Fasteners Ltd.
Respondent/s
Appearance :
S/Sh R.Raghavan, M.Kannan,
Advocates
Shri V.V.Hariharan, JCDR
For the Assessees
For the Revenue
CORAM:
Honble Ms. Jyoti Balasundaram, Vice-President
Honble Dr. Chittaranjan Satapathy, Technical Member
Date of hearing : 06.01.2011
Date of decision : 06.01.2011
Final Order No.____________
Per Jyoti Balasundaram
The issue in dispute in the above appeals (details of which are set out in the annexure to this order) is as to whether the value adopted by M/s.Sundaram Fasteners Ltd., (hereinafter referred to as SFL), who are manufacturers of nuts, bolts and screws falling under Chapter Heading 73.18 of the Schedule to the Central Excise Tariff Act, 1985 for clearances to M/s.Sundaram Motors, Chennai (hereinafter referred to as SM) and M/s.Madras Auto Service, Chennai (hereinafter referred to as MAS), which two companies are divisions of M/s.T.V.Sundaram Iyengar & Sons, Madurai (hereinafter referred to as TVS), and TVS & SFL are interconnected undertakings, should be based on the price at which the goods were sold by SM & MAS as per the provisions of Section 4 (1) (b) of the Central Excise Act, 1944 read with Rule 11, 9 and 10 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
2. We have heard both sides. The undisputed factual position is that SFL cleared the goods both to related persons (interconnected undertakings) as well as to independent buyers. This being so, the provisions of Rule 9 which prescribes that when an assessee so arranges that the excisable goods are not sold by assessees except to or through a person who is related in the manner specified .. 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 .., are not attracted, in the light of the apex courts decision in CCE Vs Aquamall Water Solutions Ltd. [2006 (193) ELT A197 (SC)]. The apex court accepted the contention that duty is to be paid on the price at which the goods are sold to independent third parties. Following the ratio of the above decision, we set aside the demands confirmed against and penalties imposed upon the assessees and allow Appeal Nos.E/711 & 712/2005 and E/698/2007 on merits, without going into the argument raised in these appeals that the demands are barred by limitation. As a consequence, Appeal Nos.E/755 & 1056/2005 and E/865 & 866/2006 challenging the dropping of the demands on the ground that mutuality interest is not required to be established between the interconnected undertakings in order to invoke the provisions of Rule 9 and 10 of the Valuation Rules, are rejected.
3. In the result, appeals of the assessees are allowed while the appeals of the Revenue are dismissed. CO/14/2006 in E/755/05 & CO/26/2007 in E/866/06 are dismissed as they are only in the nature of comments upon/reply to the Revenues appeals.
(Operative part of the order was
pronounced in open court on 6.1.2011)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE-PRESIDENT
gs
Encl : ANNEXURE
Appeal Nos.E/712/2005 etc.
ANNEXURE
S.No.
Show Cause Notice Date
Period of Dispute
Appeal No.
Duty
Penalty
Remarks
1.
17.2.2004
1.7.2000 to 28.2.2003
E/711/2005
(SFL appeal)
1,48,50,570
1,48,50,570
-
2.
-do-
-do-
E/712/2005 (SFL appeal)
-
5,00,000 Rs.5 lakhs on Sh.K.Srinivasalu, Sr.Manager (Finance)
3. 4.10.2006 1.3.2003 to 31.5.2004 E/698/07 (SFL appeal) 1,85,05,737 1,85,05,737
-
4. 13/2004 dt. 3.3.2004 10/2004 dt.7.5.2004 1.7.2000 to 28.2.2003 1.4.2003 to 31.3.04 E/755/05 (Revenue Appeal) 19,84,322 50,000 Addl.Commissioner holds that demand for 1.7.00 to 31.1.03 barred by limitation and confirms demand for normal period with penalty. CCE (A) allows SFL appeal.
5. 8.4.2004 1.3.2003 to 31.3.2003 E/1056/05 (Revenue appeal) 2,81,414 2,00,000 Dy. Commissioner confirms demand and imposes penalty. CCE (A) allows SFLs appeal.
6. 25/05 dt. 6.6.2005 1.7.2000 to 28.5.2004 E/866/06 (Revenue appeal) 1,29,73,960 CCE drops proceedings. This is Dept. appeal
7. 44/05 dt. 26.7.2005 1.7.2000 to 28.5.2004 E/865/06 (Revenue appeal) 1,16,90,630 TVS Autolec is wholly subsidiary of SFL during the relevant period. CCE drops proceedings. This is Dept. appeal.
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