TMI Blog2022 (2) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order, to the effect that the transaction between the Appellant and other OMCs is not sale but a product sharing arrangement on load/ debt basis, wherein whatever supply is made by the Appellant/ BPCL to the other three OMCs, they i.e. BPCL get back the same quantity from the respective OMCs, are factually incorrect and do not bear from the terms of the MoU - once the adjudicating authority found that the mutuality of interest is not relevant to the instant case, the only conclusion ought to be dropping the SCNs. However, the adjudicating authority went beyond the scope of SCN and made observations which were never alleged in the SCN and have been proved to be incorrect by the Ld. Counsel for the appellant. Such approach of the adjudicating authority of travelling beyond the scope of SCN is legally untenable and held to be a violation of natural justice. The Appellant has correctly valued the goods supplied to the other OMCs at transaction value, viz. the Import Parity Price under the MoU - Appeal allowed - decided in favor of appellant. - Excise Appeal No.161 of 2006 - FINAL ORDER NO.75055/2022 - Dated:- 1-2-2022 - SHRI P. K. CHOUDHARY, JUDICIAL MEMBER AND SHRI P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces were made and excise duty was discharged at transaction value which was arrived at in terms of Multilateral Product Sale Purchase Agreement (MPSPA) or MoU dated 31.03.2002, viz. IPP/ RGP. 6. The valuation of goods cleared by the Appellant to BPCL was accepted by the department. However, the valuation of goods cleared to other OMCs (viz. IOCL, IBP, HPCL) was challenged by the department by issuance of the Show Cause Notices (SCNs) dated 27.01.2004 and 27.07.2004. The said SCNs alleged that the Appellant and the OMCs were mutually interested in the business of each other inasmuch as the MoU permitted the Appellant to use the marketing network of the other OMCs, and OMCs also benefited from the MoU. 7. The SCNs proposed to adopt the value at which the excise duty was paid on clearances made by the Appellant to BPCL, as the assessable value for clearances made to other OMCs. The appellant contested the said SCNs, however, the impugned order dated 26.12.2005 was passed confirming the demand proposed in the show cause notice. The OIO observed that: the arrangement as per MoU is so that whatever supply is made by the Appellant/ BPCL to the other three OMCs, they i.e. BPCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76-CESTAT-BANG] Bharat Petroleum Corporation Ltd. V. Commissioner of C. Ex., Coimbatore [2016 (342) E.L.T. 602 (Tri. - Chennai)] Commissioner of C. Ex., Mumbai-IV v. Indian Oil Corporation Ltd. [2014 (308) E.L.T. 502 (Tri. - Mumbai)] Indian Oil Corporation Ltd. V. Commissioner of C. Ex., Allahabad [2014 (300) E.L.T. 539 (Tri. - Del.)] Kochi Refineries Ltd. V. Commissioner of Central Excise, Cochin [2017 (349) E.L.T. 338 (Tri. - Bang.)] c. The impugned order drops the ground of mutuality of interest which was the only basis for issuance of the SCNs. Further, the impugned order is based on the grounds/ facts which are both beyond the scope of SCN and are also incorrect. A para-wise rebuttal of the impugned order is given by the appellant to substantiate this contention. 10. The Learned Authorized Representative appearing on behalf of the respondent Revenue justified the impugned order and placed primary reliance on the decision of the Tribunal in the case of Bharat Petroleum Corporation Ltd. v. CCE, Nasik, 2009 (242) E.L.T. 358 (Tri. Mumbai), which decided the identical issue against the assessee and against which order the appeal of the assessee is pending befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oU, the transaction between the Appellant and the other OMCs is in the nature of sale, for which appropriate consideration (in the form of Import Parity Price) has been provided. Further, the MoU provides for actual payment of price by other OMCs to the Appellant on the basis of joint certificates and claim sheets, with a credit period of 15 days. Mr. Narasimhan also drew the attention of the bench to the statement of Shri P. K. Barua, Chief Manager (F A) recorded on 14.05.2004, forming part of the SCN dated 27.07.2004, which is reproduced hereunder: Q. No. 14:- How is payment made by the purchasing OMCs for products lifted by them? Ans:- After the signing of the joint certificate weekly claims are raised by NRL to the respective OMCs. The OMCs get a credit period of 15 days and on expiry of the credit period, payment is made through cheque/ bank transfer. 16. The said statement has not been challenged by the department in the SCNs as well as the impugned order. 17. On the basis of above, we have no hesitation in holding that the findings of the adjudicating authority in the impugned order, to the effect that the transaction between the Appellant and other OMCs is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority of travelling beyond the scope of SCN is legally untenable and held to be a violation of natural justice by the Hon ble Supreme Court in the following cases: CCE, Nagpur v. Ballarpur Industries Ltd., 2007 (215) ELT 489 (SC) CCE v. Champdany Industries Ltd., 2009 (241) E.L.T. 481 (S.C.) 21. As regards the reliance placed by the Ld. Departmental Representative on the decision of Bharat Petroleum Corporation Ltd. v. CCE, Nasik, 2009 (242) E.L.T. 358 (Tri. Mumbai), we observe that the said judgment did not follow the already existing coordinate bench decision of the Tribunal, Bangalore Bench in the case of HPCL, which has been affirmed by the Hon ble Supreme Court. Further, the said decision has already been dissented by the Tribunal, Mumbai Bench itself, in the case of CCE, Mumbai-IV vs. Indian Oil Corporation Ltd., 2014 (308) ELT 502 (Tri-Mumbai) and even the subsequent decisions of the Tribunal have relied on HPCL s case. Thus, we do not find the reliance of the Ld. Departmental Representative to be legally correct. 22. Following the above cases and also in view of the discussion on the merits of the case, we hold that the Appellant has correctly va ..... X X X X Extracts X X X X X X X X Extracts X X X X
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