Bilag Industries Pvt ltd & Anr Vs Commissioner of Central Excise, Daman & Anr(Supreme Court)
Date-22nd March 2023
Sub-Who can be said to be related person u/s 4(4)(c) of the Central Excise Act, 1944 to enable the authorities to discard the transaction value and arrive at a valuation otherwise?

The Supreme Court in this decision considered the definition as contained in Section 4(4)(c) as per which in order that two persons can be said to be related to each other, there must be interest of two persons (said to be related ), directly or indirectly in the business of each other. Thus the buyer and seller must have interest in each other’s business before the provision of Section 4(4)(c) could be applied. The Court after considering the decision in the case of Commissioner of Central Excise ,Chandigarh Vs KWALITY Icecream Co(2010) 14 SCR 409(SC) and other decisions held that in the instant case there could not be said to be interest in each other’s business and thus the revenue’s decision in rejecting the value at which goods were sold was erroneous particularly in absence of any allegation that the goods were sold at a price which was below the market price.

This decision though in the context of Central Excise Act, 1944 will be helpful in interpretation under the GST and Customs Laws.

Ramesh Patodia
23-03-2023