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TMI Blog2015 (3) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of stock verification it was found that the appellant/assesee were clearing the excisable goods "High Speed Diesel (HSD in short) to their ONGC Nhava Depot where the said goods were sold to their customers. The duty liability was discharged on the stock transfer price at the time of removal from the assessee'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 Rs. 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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t charged by the appellant from the buyers is the transaction value and therefore, the appellant is rightly liable to discharge duty liability on the total consideration received. Revenue also placed reliance on the decision of this Tribunal in the case of CCE Nashik vs. VIP Industries Ltd. - 2012 (275) ELT 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be discharged. The decisions of this Tribunal in the case of VIP Industries Ltd. (supra) and also the Madras Refineries Ltd. case (supra) clearly support this view. Once the duty demand is confirmed the interest liability is automatic and consequential and has to be confirmed. 6.3 As regards the invocation 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 me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods were removed on payment of duty by tanker/truck to IOCL, Nhava Depot, a duty paid location/depot from where the same was supplied to ONGC through dedicated pipeline upto ONGC jetty, where delivery was given to ONGC Barges/Jetty. Product price charged ex-terminal to JNPT depot being the 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 Rs. 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 dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries Ltd.- 2003 (155) ELT 9 (SC), . squarely cover the issue wherein it has been expressly held that no addition to the assessable value on account of transportation/handling charged incurred after removal of the goods from the place of removal, is permissible. 10.1 As regards non-disclosure 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' i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said date. During the period in dispute, when goods were being cleared from the refinery, no duty was paid and the goods were stored in the approved warehouse without payment of duty. When the goods were being cleared from the warehouse, the duty was being paid. 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 tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deemed to include the duty payable on such goods. (2) The provisions of this section shall not apply in respect of any excisable goods for which a tariff value has been fixed under sub-section (2) of Section 3. (3) ..... (c) "place of removal" 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, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial) is of the view that the value has to be determined under Rule 5 read with Rule 7. For appreciating the said Rules, the same are reproduced below:- "RULE 5. Where any excisable goods are sold in the circumstances specified 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 when the old Section 4 existed. That old Section 4 was based upon the deemed value concept while the new Section 4 is based upon the transaction value. The decision of the Hon'ble Supreme Court was with 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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