TMI Blog2015 (3) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly. There is no dispute about the fact that the other charges were collected by the appellant and these were not included in the assessable value while making the payment of duty at the warehouse. There can be no doubt that for all such clearances, they were required to pay the duty at the sale price at the depot. During the period 1st July 2000 to 13th May 2003, the goods were not sold at the place of removal (which is warehouse in this case). In my view, Rule 5 is therefore not applicable to the present case. Further, Rule 7 is applicable when the goods are not sold by the assessee at the time and place of removal but are transferred to depot, etc. from where the excisable goods are to be sold. This is precisely the situation in the present case. The appellant has not sold the goods at the time and place of removal but stock transferred to their depot where the goods were stored and later on sold. In view of the above analysis, in my view, Rule 5 of the Central Excise Valuation Rules, 2000 will not be applicable, but the Rule 7 would applicable. Further, Rule 7 very clearly indicates that the value shall be the normal transaction value of such goods sold from such other pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's warehouses. However, on scrutiny of the invoices issued from the said depot, it was found that the assessee was selling the excisable goods from their depot at a higher price than the stock transfer price, resulting in short payment of duty. Accordingly, a show-cause notice was issued vide notice dated 01/02/2006 for the period January 2001 to 05/09/2004 demanding Central Excise duty of ₹ 43,72,070/-. The said notice was adjudicated vide order dated 28/02/2007 by the Jurisdictional Additional Commissioner wherein he confirmed a duty demand of ₹ 36,36,525/- and the amount paid by the appellant under protest was appropriated and the protest was also vacated. The said order also confirmed recovery of the interest on the above duty amount and also imposed an equivalent amount of penalty. The ground for demanding the differential duty was that the appellant had collected additional amounts from the buyers which were shown in the invoices as other charges , over and above the selling price towards handling, transportation or facilitation. On such additional amounts recovered, the appellant had not discharged any excise duty liability. 4. The learned Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT 602 (Tri-Mum) wherein it was held that with effect from 01/07/2000, in terms of Rule 7 of the Valuation Rules, while arriving at the transaction value for the purpose of charging excise duty, the cost of transportation from the factory to the depot is to be included and no abatement is permitted. Reliance is also placed on the decision of this Tribunal in the case of CCE, Chennai vs. Madras Refineries Ltd. - 2007 (207) ELT 582 (Tri-Chennai) wherein also it was held that transfer charges incurred in relation to storage tanks and pipelines are includible in assessable value of the goods sold by the asssessee. Therefore, it is prayed that he impugned order be upheld. 6. We have carefully considered the submissions made by both the sides. 6.1 Rule 7 of the Central Excise valuation (Determination of Price of Excisable Goods) Rules, 2000 reads as follows: Rule 7- Where the excisable goods are not sold by the assessee at the time and place of removal but are transferred to a depot, premises of a consignment agent or any other place or premises (hereinafter to as such other place ) from where the excisable goods are to be sold after their clearance from the place of removal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocation of extended period of time, merely because the appellant is a Public Sector Undertaking, it does not mean that the appellant is liable to pay duty only for the normal period of limitation. If the appellant does not comply with the provisions of law and the documentary evidences available on record does not support the appellant's contention, the presumption that the appellant suppressed the facts would naturally arise. The law does not make any distinction between a PSU or non-PSU. IN this view of the matter, invocation of extended period of time in the present case is fully justified. Consequently, the assessee is also liable to penalty under the provisions of Section 11AC of the Central Excise Act, 1944. Therefore, we do not find any infirmity in the impugned order passed by the lower adjudicating and appellate authorities. 7. Thus, the appeal is dismissed as devoid of merits. (Pronounced in Court on .................) Per: Anil Choudhary: 8. I had the benefit of going through the order recorded by, learned brother Shri P.R. Chandrasekharan, Member (Technical), but I am unable to agree with the same and hence, I record my separate order. 9. From perusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WHOLESALE price at the factory gate/warehouse had been adopted as assessable value for payment of duty in respect of supplies made to both the category of supply to (i) JNPT Port Trust, and (ii) IOCL, Nhava depot, from where eventually sales were made to ONGC Barges. It was further stated that with respect to sales effect from IOCL, Nhava depot through pipeline to ONGC Barges/ONGC Jetty, additional amount of ₹ 172.54 per KL (in majority of the cases) was being recovered and shown in the sales invoice as 'other charges' over and above the selling price towards handling, transportation etc. On such additional amount recovered as other charges, IOCL, JNPT terminal has not paid duty, as such amount was towards handling/transportation and facility charges not in connection with sale price and as such these charges were not liable to be includible in the assessable value for levy of duty. It was further contended that during the period January, 2001 to 13.5.2003, the place of removal was defined under the Act at the factory gate or warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty. Thus, when pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosure of transport/handling charges separately in sale invoices, I find that it is an admitted fact that the appellant have incurred such expenses from the fact on record. Thus, the matter needs to be remanded to give opportunity to assessee/appellant to produce calculation of the charges incurred, so that excise duty is correctly assessed after reduction from gross amount billed, I further hold that there is no element of suppression or mis-declaration attributable on the part of the appellant. Thus, extended period is not invocable. Penalty under section 11AC is set aside. 11. Thus, the appeal is allowed in part and remanded for recalculation of assessable value as indicated. DIFFERENCE OF OPINION 12. In view of the difference of opinion between two Members, the matter is placed before the hon'ble President for reference to the third Member. (i) Whether the 'place of removal' in respect of goods sold and delivered at ONGC, Nhava Depot, the said place should be taken as the 'place of removal' and the cost of transportation from the refineries to the 'place of removal' should be included for determination of assessable value, as held by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 15. In the present case, the appellant had a warehouse within the Nhava Sheva Port premises. They were clearing the petroleum products on payment of duty at the said warehouse. In addition to the said warehouse, the appellant had another depot in Nhava and the said depot was meant to cater to the needs of operations relating to ONGC. Thus the appellant has made the storage depot in Nhava. They had installed pipelines from the said depot to certain places in jetties and from such jetties the petroleum products were pumped into barges and in other vessels as per the requirement. The petroleum products were being transferred from the warehouse to the depot by tanker trucks. 15.1 While clearing/stock transferring the goods from the warehouse to depot, the duty was paid. For this purpose, the goods were valued as applicable to various customers in Nhava Sheva warehouse. It is to be noted that in the case of goods being transferred from warehouse to depot in Nhava, no sale was taking place and it was a case of stock transfer to their own depot. 15.2 The dispute is relating to the valuation of such stock transfer. The appellant was selling the goods from the depot at a price wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval means - (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii). a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without 13b [payment of duty;] 13b (iii) depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed; (cc) time of removal , in respect of the excisable goods removed from the place of removal referred to in sub-clause (iii) of clause (c), shall be deemed to be the time at which such goods are cleared from the factory; (d) transaction value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in clause (a) of sub-section (1) of section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the cost of transportation from the place of removal upto the place of delivery of such excisable goods. Explanation 1.- Cost of transportation includes- (i) the actual cost of transportation; and (ii) in case where freight is averaged, the cost of transportation calculated in accordance with generally accepted principles of costing. Explanation 2.- For removal of doubts, it is clarified that the cost of transportation from the factory to the place of removal, where the factory is not the place of removal, shall not be excluded for the purposes of determining the value of the excisable goods. RULE 7. Where the excisable goods are not sold by the assessee at the time and place of removal but are transferred to a depot, premises of a consignment agent or any other place or premises (hereinafter to as such other place ) from where the excisable goods are to be sold after their clearance from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the old Section 4. In fact this Tribunal in the case of the very same assessee i.e. VIP Industries Ltd. in subsequent judgment reported in 2012 (275) ELT 602 (T) , has distinguished the same and explained in detail why the said judgment would not be applicable with reference to new Section 4. Member (Judicial) has also quoted another judgment of this Tribunal in the case of Ispat Industries Ltd. I have gone through the said judgment. In the said judgment, it has been clearly stated that the provisions of Rule 7 of the Valuation Rules relating to sales made from a depot or similar place to which the goods are transferred by the assessee, would apply. Rule 7 does not make any provision for exclusion of the cost of transportation and in my view, the said decision of the Tribunal does not help the cause of the assessee. On the contrary, this Tribunal's decision in the case of CCE, Chennai vs. Madras Refineries Ltd. reported in 2007 (207) ELT 582 would be squarely applicable to the facts of the present case. 19. The second point of difference is whether extended period of time is rightly invokable as the appellant has not complied with the provisions of law and has n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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