The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand on the clearance of non-alloy bright bar on the ground of non-violation of Rule 9 of the Central Excise Valuation Rules, 2000.
Jai Ba Metals, the appellant assessee was engaged in the manufacture of non-alloy bright bar and clearing the finished products at lesser value to the buyer Gera Enterprises, Faridabad.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the recovery of short levy of Excise duty of Rs. 2,44,191/- based on the value of clearances of Rs. 1,81,57,445/-for violation of provisions of Section 4(1)(b) of Central Excise Act, 1994 read with Rules 8 and 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules.
Rajiv Agnihotri, the counsel for the assessee contended that the impugned order was not sustainable in law as the same had been passed without properly appreciating the facts and the law and the binding judicial precedents.
Shivani, the counsel for the department contended that the assessee had been clearing the manufactured goods at a lower assessable value to Gera Enterprises, who was a related person of the assessee as the same was a proprietary concern owned by M.L. Gera who was the father of Raj Kumar Gera i.e. the proprietor of the assessee.
The Bench observed that in the case of Sudershan Castings Pvt. Ltd, the court held that when the goods are sold to related persons as well as to independent buyers, in that case, Rule 9 of Central Excise Valuation Rules will not be applicable.
The two-member bench comprising S S Garg (Judicial) and Anjani Kumar (Technical) quashed the excise duty demand while allowing the appeal filed by the assessee.
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