Hindustan Engineering Enterprises Vs Commissioner of Central Excise And Service Tax (CESTAT Chandigarh)
Excise Duty Demand Set Aside as Two Companies Could Not Be Treated as ‘Related Persons’; Undervaluation Allegation Rejected Because Manufacturer and Marketing Company Were Not Related Persons; Rule 9 Valuation Provisions Held Inapplicable Because Goods Were Not Sold Exclusively Through Marketing Company.
The appeals were filed against a common order dated 15.03.2018 passed by the Commissioner (Appeals), CGST, Panchkula, who had rejected the appellants’ appeals and confirmed the Order-in-Original. Since both appeals involved interconnected issues and had been decided through a common order, they were heard together.
The appellant was engaged in the manufacture of submersible pumps falling under Chapter Heading 841313. The products were sold through a marketing firm, M/s Malkoh Marketing Pvt. Ltd. During investigation, the department alleged that the appellant had deliberately lowered the price of its products by routing sales through M/s Malkoh, resulting in evasion of Central Excise duty. Show cause notices had been issued for earlier periods, and for the period September 2015 to June 2016, the department calculated alleged duty evasion of ₹2,28,348. A show cause notice dated 05.10.2016 was issued demanding recovery of the duty along with interest and proposing penalties. The adjudicating authority confirmed the demand, interest, and penalties through Order-in-Original dated 18.10.2017. The Commissioner (Appeals) upheld the order, leading to the present appeals.
