Case Details: Commissioner of Central Excise and CGST, Noida Versus Denso India Ltd. (2025) 28 Centax 21 (S.C.)
Judiciary and Counsel Details
- J.B. Pardiwala & R. Mahadevan, JJ.
- S/Shri N. Venkatraman, A.S.G., V.C. Bharathi, Shlok Chandra, Navanjay Mahapatra, Padmesh Mishra, Ms Smriti Kumari, Advs. & Gurmeet Singh Makker, AOR, for the Petitioner.
Facts of the Case
The assessee, a manufacturer, supplied a significant portion of its goods to Maruti Udyog Ltd., which held a 10% equity stake in the assessee company. The Revenue contended that since 33.74% to 43.6% of the assessee’s sales were made to Maruti Udyog Ltd., the transaction was subject to Rule 9 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Additionally, the Revenue sought to justify adding 10% notional profit to the assessable value of these clearances. The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Allahabad, ruled that Rule 9 was inapplicable as the assessee also made sales to unrelated buyers and held that the addition of notional profit lacked legal backing. Aggrieved by the decision, the Revenue filed an appeal before the Supreme Court.
Supreme Court Held
The Hon’ble Supreme Court upheld the Tribunal’s ruling, holding that Rule 9 applied only when all sales were made to related persons, which was not the case here. It further affirmed that the 10% notional profit addition had no legal basis under the Central Excise Act, 1944, or the Valuation Rules. Accordingly, the appeal was dismissed, delay condoned, and pending applications disposed of.
List of Cases Reviewed
- Denso India Ltd. v. Commissioner — (2025) 28 Centax 20 (Tri. – All.) — Affirmed [Para 2]
