CCE Vs. BEACON NEYRPIC LTD.

JUDGEMENT

(1.) THIS is an appeal filed by the Revenue. The facts of the case are that the original authority had confirmed demand of differential duty of Rs. 52,900/ - and Rs. 49,000/ - disposing Show Cause Notices dated 12.5.1994 and 22.8.1994 respectively. The demands were raised on the differential sale price of the holding -company of the assessee -firm which had purchased in entirety the excisable goods manufactured by the respondent -assessee. The demand was on the basis that the respondents and its buyer being respectively subsidiary -company and holding -company were related and the sale price of the related person was the basis for assessment of duty due on the excisable goods manufactured and cleared to the holding -company. In the impugned order, the Commissioner (Appeals) vacated the order of the original authority following the ratio of the Final Order No. 432/2001 dated 26.3.2001. In the decision of the Tribunal, relied on by the Commissioner (Appeals), the Tribunal had held that unless mutuality of interest was established between the assessee and the buyer, 100% sales to 60% stake holder in the assessee -firm was not enough to treat the transactions as between related persons. The appeal filed by the Revenue is on the basis that as per the definition of 'related person' under Section 4(4)(c) of the erstwhile Central Excise Act, 1944 a holding -company and a subsidiary -company were to be treated as related persons and that the valuation of the impugned goods on the basis of the sale price of the holding -company and the subsequent demand made in the original order were in accordance with law. The impugned order which vacated the order of the original authority was not sustainable.

(2.) THE learned Counsel for the respondents submits a copy of the judgment of the apex Court in Commissioner of Central Excise v. Beacon Neyrpic Ltd. reported in 2006 (193) ELT 16 (SC), wherein the appeal filed by the Revenue against the order of the Tribunal, relied on by the Commissioner (Appeals), was dismissed and the order of the Tribunal sustained. The apex Court had held that the assessee being related to its subsidiary -company by itself was not sufficient to invoke Central Excise (Valuation) Rules, 1975 read with Section 4(1)(a) of the Central Excise Act, 1944. Department had to establish that the relationship between the assessee and its related buyer had influenced the sale price of the excisable goods manufactured by the assessee -company. In the circumstances the appeal filed by the Revenue has no merit. The same is dismissed.