TMI Blog2014 (2) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... termined for each removal of excisable goods. In other words, the new Section 4 envisages the possibility of the goods being sold at different values to different places and to different customers and each of such values were acceptable for the purpose of assessment of duty, so long as the other conditions prescribed therein are satisfied. On a given day, then there would be only one value irrespective of the fact that the goods are removed from different refineries and sold from different different depots. Such an interpretation of law, in our view defeats the purpose and object of new Section 4 which to levy excise duty on transaction value for each removal. Further Rule 7 of the Valuation Rules, 2000 also envisages that where the goods are sold by the assessee at the time and place of removal but are transferred to depot/other premises from where the excisable goods are to be sold after their clearance from the place of removal and where the assessee and buyer of the goods are not related and price is the sole consideration for sale, then the value shall be the normal transaction value such goods sold from such other place at or about the same time, and where such goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the learned Commissioner for valid reasons. His order fairly took note of the contentions of the assessee as given in their reply to the show-cause notice, but did not examine any of those contentions. The adjudicating authority just chose to frame the issue and deal with the same, in his own way, with reference to Rule 7 read with Rule 2 (b) of the Central Excise Valuation Rules, 2000. Neither the Board's circulars nor the case law were referred to in this context. The plea of limitation was disposed of in a cursory manner without referring to the definite pleadings of the assessee. It thus appears that the impugned order is vitiated by non-application of mind to the contentions raised by the assessee. It cannot be accepted as a speaking order. Therefore, we set aside the impugned order and allow this appeal by way of remand with a request to the learned Commissioner to pass a speaking order on the substantive issue by duly considering the contentions raised by the assessee. Needless to say that the party should be given a reasonable opportunity of being heard. Considering the high stakes in this case, we are inclined to accept the prayer of the learned JCDR for a time-bound d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the depots taken as a unit" and that they had contravened the provisions of Section 4(1) (b) of the Central Excise Act read with Rule 7 i bid. According to the department, HPCL should have taken the assessable value of the highest aggregate quantity sold, taking into consideration all the depots together at about the same time rather than to take the value of highest aggregate quantity sold at a particular depot over a period of time. On the basis, the show-cause notice demanded differential duty on the petroleum products sold at all the three depots during the period of dispute. It invoked the extended period of limitation under the proviso to Section 11A(1) of the Act for recovery of the differential duty on the ground on the ground of suppression of material facts by the appellant with intent to evade payment of appropriate duty'. The demand of duty and other proposals were contested by the appellant on legal grounds based on their own interpretation of the provisions of Rule 7. In their reply to the show-cause notice, the appellant contended that the maximum quantity of goods sold to the customer in a single transaction in an invoice was the "greatest aggregate value" unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of all such goods sold by all depots throughout the country should be taken and on such value, the excise duty should be levied. Aggrieved of this decision, the appellant is before us. 5. The Ld. Counsel for the appellant submits that this issue has been clarified by the Board on several occasions in the past and in particular, in Circular No. 251/85/96 dated 14/10/1996, the matter was clarified as follows: How assessable value will be determined at the factory gate in respect of goods to be cleared from other places of removal such as depot etc. Clarification Assessments need not kept provisional till the actual sale price of the excisable goods cleared from places of removal other than factory gate is known. The assessee may be asked to declare and pay duty at the price prevailing at such other place of removal on the date such goods meant for that place of removal are cleared from the factory gate. To illustrate, if the factory is at Bombay and the storage depot is at Ahmedabad, then for a consignment meant for Ahmedabad Depot, cleared from Bombay factory on, say, 1st January, the price at which an earlier consignment of goods of the same destination, is sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of sale at or about the same time, the normal transaction value for sale to independent buyer will have to be determined and taken as basis for valuation of goods at the time of removal from factory/warehouse. It follows from the Valuation that in such categories of cases also if the price charges is with reference to delivery at a place other than the depot. Etc., then the actual cost of transportation will not be taken to be a part of the transaction value and exclusion of such cost allowed on similar lines as discussed earlier, when sales are effected from factory gate/warehouse. By way of illustration if an assessee transfers a consignment of paper to his depot from Delhi to Agra on 5.7.2000, and that variety and quality of paper is normally being sold at the Agra depot on 5.7.2000 at transaction value of Rs. 15,000 per tonne to unrelated buyers, where price is the sole consideration for sale, the consignment cleared firm the factory at Delhi on 5.7.2000 shall be assessed to duty on the basis of Rs. 15,0000 per tonne as the assessable value. If assuming that on 5.7.2000 there were no sales of that variety from Agra depot but the sales were effected on 1.7.2000, then the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 30/06/2000, in para 26, the Board further clarified as follows: "The Application of new section 4 and the valuation rules made thereunder to petroleum products may now be mentioned. Under the provisions of the existing section 4 and rules made thereunder, the practice being followed is to assess the price administered petroleum products like motor spirit, HSD, SKO (domestic) and LPG to duty on the ex-storage sale prices that are fixed by the Oil Co-ordination Committee (OCC) from time to time. The assessable value is the same irrespective of whether the administered petroleum products are sold at the refineries or through the marketing companies. It would be seen that but for the normal value being replaced by transaction value or normal transaction value(in case goods are sold at a point other than the place of removal), there is no essential difference in the scheme of valuation of petroleum products under the old Section 4 and the new Section 4. As such, the new Section 4 and the valuation rules when applied to the marketing of price administered petroleum products as it exists should not make any material difference in assessable value of these products". 7.2 From the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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