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2019 (4) TMI 999 - AT - Central ExciseValuation - inclusion of Trade Margin in the assessable value - Appellant has entered into agreement with the OMCs for supply on Natural gas/ CNG on principal to principal basis - extended period of limitation - HELD THAT:- The terms of the supply were negotiated on principal to principal basis and it specifically provides the responsibility of the Appellant and OMCs to do certain acts and services. Hence clearly it is a negotiated deal between the two parties - The agreement between the appellant and OMCs clearly shows that the trade margin were being decided at fixed level by the parties to such agreement. The Trade Margin is decided after considering the costs and expenses incurred by OMCs including their profits. The above terms of the agreement clearly show that the transaction between the appellant and the OMCs is at arms length and cannot be doubted. Hence the Trade Margin cannot be included in the assessable value at the Appellant’s end and hence the demand raised against the Appellant on Trade margin is not sustainable. Reliance can be placed in the case of MAHANAGAR GAS LIMITED VERSUS CCE, MUMBAI - V [2016 (9) TMI 782 - CESTAT MUMBAI], where it was held that trade discount allowed by whatever name called is an admissible deduction and the appellants are not liable to include the same for the purpose of payment of duty. In the present case also the value of the goods between the Appellant and OMCs is fixed as per the agreement and hence the same cannot be disputed - It is also a fact that the OMCs are Public Undertakings and therefore, there is no iota of doubt that the transaction between the parties is the sole consideration and at arm’s length - there is no commission being paid by the appellant to the OMCs and what has been provided by the appellant is only a trade discount, which is a normal business practice - the demand on ‘Trade Margin’ confirmed against the Appellant is not sustainable and is required to be set aside. Time limitation - HELD THAT:- The Revenue was in knowledge of the valuation method adopted by the appellant. The Appellant since 2005 had made correspondence with the department disclosing the price structure with bulk customers, retail customers and OMCs to the Revenue - Since there is no ingredient of any malafide intention on the part of the Appellant to evade the excise duty, the extended period cannot be invoked for raising demand. Appeal allowed - decided in favor of appellant.
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