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2. Briefly stated the facts of the case are that the main appellant are engaged in the manufacture of Vanilla Powder Flavour (VPF), other flavouring essences / concentrates generally represented 'Trusil Concentrates' falling under Chapter sub- heading 33021010 of Central Excise Tariff Act, 1985. During the course of audit, it was noticed that the appellant have been manufacturing VPF and supplying the same under an agreement dated 11.12.2003 between them and M/s. International Flavours & Fragrances India Private Limited, Chennai (IFFL, for short) in accordance with the terms and conditions of the said agreement. The said agreement has been extended from time to time and last extension was in force till 31.12.2011. Under the said agreement, the appellant is required to procure/purchase raw materials and packing materials on its own and to manufacture VPF and supply the same to IFFL at the price arrived at under Section 4 of the Central Excise Act, 1944. Alleging that there has been no sale or purchase between the appellant and the IFFL, the determination of value of VPF by the appellant are not in consonance with Section 4 of the Central Excise Act, 1944 which is proposed to be determined in terms of Rule 11 of the E/25655,21769,21770,21771,21768/2017, 21997/2018 E/25660/2013, E/21774,21773,21776,21775/2017 E/21996/2018 Central Excise (Determination of price of excisable goods) Rules, 2000, show-cause notice was issued on 25.01.2012 demanding differential duty of Rs.51,90,636/- along with interest and penalty. On adjudication, the demand was confirmed with interest and penalty. Periodical show-cause notices have been issued thereafter involving the period from June 2011 to March 2017. All these notices have been adjudicated and demands were confirmed with interest and penalties; also, penalty has been imposed on IFFL under Rule 26 of the Central Excise Rules, 2002. Aggrieve by the said Orders the appellants filed appeals before the learned Commissioner(Appeals), who in turn rejected the same. Hence, these appeals.

3.1. At the outset, the learned advocate for the appellant has submitted that the Appellant, a proprietorship concern and engaged in manufacturing of two products viz. Vanilla Powder and Trusil Powder. These products are supplied only to IFFL, Chennai. IFFL, initially, incorporated as a public limited company and later converted into a private limited company in the year 2008. IFFL is mainly engaged in the manufacture/business of liquid and powder, preservatives, aromatic compounds, mixed seasoning powders etc. Out of the total turn-over of IFFL, 90% is towards manufacturing / business of fragrances and flavours and the balance 10% is from trading of food colouring preparations / VPF purchased from M/s. Mallya Fine Chem and the appellant. By virtue of agreement dated 11.12.2003 with the IFFL, the appellant commenced manufacturing of VPFF from January 2004 and supplied the same to IFFL. In terms of the agreement, the VPF is to be manufactured according to the formulations, specifications and quality furnished by IFFL. The appellant was required to purchase all the raw materials including the concentrates, packing materials etc. and use the same in the manufacture of VPF which is sold only to IFFL. Also, the appellant is required to discharge all taxes of State and E/25655,21769,21770,21771,21768/2017, 21997/2018 E/25660/2013, E/21774,21773,21776,21775/2017 E/21996/2018 Central including Central Excise duty. The price for the product is mutually agreed on outright sale basis which is inclusive of excise duty but exclusive of Sales Tax. For manufacture of VPF, they purchased concentrates, Dextrose Monohydrate, food grade starch and packing materials. After manufacture of VPF, they packed it in different various quantities and sold to IFFL, after discharging excise duty on the basis of the sale price at which it is sold to IFFL. Also, an agreement dated 19.12.2003 was entered with IFFL for supply of Trusil powder on job work basis. The appellant discharged the excise duty on the price at which IFFL sold the Trusil powder to their customers in accordance with Rule 10A of the Central Excise Rules, 2000 after 01.04.2007 and before that, they were discharging duty on the basis of cost of production + job work charges, in terms of the principles laid down by the Hon'ble Supreme Court in the case of Ujjagar Prints. No dispute with regard to the valuation of the Trusil powder cleared by them on job work basis.

3.5. Assailing the impugned Orders where demands have been confirmed on the ground that the transaction between the appellants and IFFL cannot be recognized as sale in the ordinary course of business or trade and the appellants and IFFL have interest in the business of each other by virtue of the terms and conditions of the agreement it is submitted referring to Section 4(1)(a) of CEA,1944 that in the present case, the Appellants have undertaken the activity of manufacture of VPF on their own account and have sold the VPF based on the agreement entered into with IFFL. In terms of the agreement, the appellants have procured all the raw materials and packing materials on their own and sold the manufactured VPF to IFFL on payment of appropriate sales tax. The sale was as per the agreed price, from time to time. IFFL was providing product formulations, specifications, brand, logo etc. to the appellants. The appellants are manufacturing the VPF based on the product specifications of E/25655,21769,21770,21771,21768/2017, 21997/2018 E/25660/2013, E/21774,21773,21776,21775/2017 E/21996/2018 IFFL. The products manufactured by the appellants are sold to IFFL at prices mutually agreed upon. The unit price is determined taking into account the cost of raw materials, packing materials, manufacturing overheads added with a reasonable profit margin of 2.5 to 3 percent. As the Appellants were buying all the requisite inputs on their own and selling the goods on outright sale basis to IFFL, at mutually agreed rates, the assessable value for the purpose of payment of Central Excise Duty is determined based on the Transaction Value in terms of Section 4(1)(a) of the Act.

7. The Revenue's contention is that the sale and purchase between the appellant and the IFFL cannot be considered as the transaction value; accordingly Section 4(1)(a) of Central Excise Act, 1944 is not applicable and the value needs to be determined under Section 4(1)(b) read with Rule 11 of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000.

8. In the show-cause notice, it is proposed to determine the value in terms of Rule 11 of Central Excise Rules based on general principles of valuation and Section 4(1) of Central Excise Act, 1944. In the impugned order, the learned Commissioner after analysing the agreement and facts of the case held that the value of VPF adopted by the appellant cannot be treated as the transaction value; therefore, the value to be determined by taking recourse to Section 4(1)(b) of the Central Excise Act read with provisions of Valuation Rules. Later analysing various rules mentioned under the Valuation Rules sequentially, the learned Commissioner held that principles of Rule 9 and Rule 10A are more than applicable and finally held that the assessable value of the VPF be re-determined on the basis of sale price of the goods adopted by the IFFL in terms of Rule 11 read with Rule 9 of the Central Excise Valuation (Determination of Price of excisable goods) Rules, 2000 for the period January 2007 to March 2007. For the period from 01.04.2007 onwards, the assessable value be determined on the sale price of the said goods adopted by IFFL in terms of Rule 11 read with Rule 10A read with Rule 9 of the Central Excise Valuation (Determination of Price of excisable goods) Rules, 2000. The appellant vehemently opposed to the said method of determination of assessable value submitting that the learned Commissioner has E/25655,21769,21770,21771,21768/2017, 21997/2018 E/25660/2013, E/21774,21773,21776,21775/2017 E/21996/2018 travelled beyond the scope of the show-cause notices; also, it is not clear from the observation of the learned Commissioner as to which particular method of valuation under relevant rule has been followed in directing determination of the assessable value of the VPF sold by the appellant to the IFFL. It is argued that the learned Commissioner at one place held that the transaction between the appellant and the IFFL are in the nature of related person; therefore Rule 9 of the Central Excise Valuation (Determination of Price of excisable goods) Rules, 2000 be adopted and also referring to inserted Rule 10A observed that Rule 10(a)(iii) is applicable for determination of the value of VPF. Therefore, the approach of the learned Commissioner is ambivalent and not sustainable.