ORDER
K.K. Usha, J. (President)
1. In this appeal at the instance of the assessee’s challenge is against the order-in-appeal passed by Commissioner (Appeals), Chandigarh, dated 10-1-2003. The issue in dispute relates to the valuation of pattern tooling manufactured by the appellant.
2. The appellants are engaged in the manufacture of pattern, jigs and fixtures falling under Chapter 84 of the Central Excise Tariff Act, 1985. These pattern, jigs and fixtures are ultimately used for manufacture of castings for tractors and vehicles. M/s. DCM Engineering Products, a company registered under the Companies Act, 1956, is engaged in the manufacture of pattern tooling as also in castings. During December, 1996 to November, 1997 they placed orders on the appellant for manufacture of pattern tooling. The appellants removed the pattern tooling to M/s. DCM Engineering Products on payment of duty on the price agreed between them for manufacture and supply of pattern tooling. M/s. DCM Engineering Products sold the pattern tooling supplied by the appellant as also the jigs/gauges manufactured by them on the basis of orders received by various independent OE manufacturers for the contract price. The appellant had supplied pattern tooling to M/s. DCM Engineering Products during the period December, 1997 to March, 1998 also.
3. Show cause notice dated 10-2-2000 was issued to the appellants alleging that the appellants and M/s. DCM Engineering Products are sister concerns, that sale price to independent buyers were not available for pattern tooling and therefore, the value of the goods could be based on costing declared by the noticees plus a notional profit at 10%. Based on the above, duty to the extent of Rs. 6,26,098/- was demanded. The appellant contended that it is incorrect to assume that the appellant and M/s. DCM Engineering Products are one and the same and that the prices at which these goods are sold to M/s. DCM Engineering Products are not sale prices to independent buyers. According to the appellant, since the value as provided under Section 4{l)(a) can be arrived on the basis of sale price received from M/s. DCM Engineering Products, there is no justification in arriving at the assessable value by taking recourse to Rule 6(b)(ii) of Central Excise (Valuation) Rules. The original authority as well as the appellate authority rejected the contention raised by the appellant and confirmed the demand. Aggrieved by the above, they have come up in appeal.
4. We heard the learned Counsel for the appellant as well as the learned DR. In the show cause notice apart from alleging that the appellants and M/s. DCM Engineering Products are sister concerns there are no materials relied upon to support the contention that they are related persons and therefore, the transaction between them cannot be treated as a sale. There are no materials to show that the transaction between the appellants and M/s. DCM Engineering Products are not at arms length and the price is not the sole consideration. Therefore, we are of the view that the prices received by the assessee from M/s. DCM Engineering Products are to be taken into consideration for the purposes of Section 4(1)(a) and the assessment has to be proceeded on that basis. There is no justification in the facts of this case to proceed under Rule 6(b)(ii) of Central Excise (Valuation) Rules.
5. In the light of the above discussion, we set aside the order impugned and allow the appeal. The appellants will be entitled to all consequential reliefs including refund of the deposit made at the time of hearing the appeal by the Commissioner (Appeals).