TMI Blog2015 (10) TMI 1993X X X X Extracts X X X X X X X X Extracts X X X X ..... uty on the basic price without deducting the notional freight element from the price, but after realization of the mistake, filed the refund claim. We do not find any reason to dis-agree with the conclusion arrived at by the ld. Commissioner (Appeals). Accordingly, the Respondent in principle are entitled to the refund claim. - Decided in favor of assessee. The issue of correctness or otherwise of the transaction value determined on the basis of the said Agreements, which is neither raised in the demand notice nor in the grounds of appeal, cannot be re-opened at this stage, which would otherwise result into traveling beyond the scope of the show-cause notice as held by the Hon'ble Supreme Court in the case of Champdany Industries Ltd. [2009 (9) TMI 7 - SUPREME COURT OF INDIA]. - Decided in favor of assessee. Both sides agree that it is necessary to ascertain the fact whether initial transaction value was higher and subsequent transaction value after deducting the notional freight, applying clause 5.4 of the agreement, became lower before allowing the said claim to the respondent. - For the limited purposes of verification of this fact, in our opinion, it is prudent to remand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a good is to be determined by incorporating the freight charge, if the said good is sold at a place other than the place of removal, as per the provisions of the Central Excise Rules. In this instant case, the contract between the assessee and their buyer also clearly agreed upon the said fact of the Rules. Hence, for breach of contract by their buyer. Central Excise Department can not be held responsible by acceding to their claim of refund. In view of the above, the said assessee is, therefore, called upon to Show Cause to the undersigned within 30( thirty) days from the date of receipt of this NOTICE as to why their above mentioned claim of refund shall not be rejected on the ground as mentioned in the aforesaid para as their instant refund claim is not admissible under Sec. 11B of the Central Excise Act. 1944. The said assessee. while submitting their reply to this NOTICE, is also required to state whether they desire to be heard in person or through their authorised representative when the case would be posted for hearing. The said assessee is also called upon to produce all the documentary, evidences on which they intend to rely upon in support of their defens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade thereunder. It is also submitted that when transportation cost was not included in the assessable value, then the buyer is being relieved from the same; the Commissioner(Appeals) has erred by mentioning that transportation cost was borne by the buyer when it should have been by the Seller i.e. the Respondent as per the agreement. Further, it is pleaded that when duty was not paid in excess, question of incorporating that fact in the show cause notice is irrelevant. 5. The ld. A.R. for the Revenue, further submitted that all sales by the Respondents to their customers, have been made only at the price statutorily mandated in the different pricing Circulars. These statutory sale prices, in the present case, are clearly the price paid or payable for excisable goods in question. It is his contention that the statutory prices, which are the prices paid or payable by their customers alone, can constitute the transaction value in the given case. Therefore, it is evident that the transaction value in the given case, is the statutory prices declared by the Respondent as per the Circular and they had correctly determined the transaction value and paid excise duty on such transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y/factory gate, hence, first allegation in the show-cause notice, does not survive. It is his submission that there was no breach of contract by the OMC's as alleged in the Notice and made a ground in the present appeal by the department. The deduction of notional rail freight paid by the respondent from their refinery at NRL to New Jalpaiguri Station, was in pursuant to Clause 5.4 of the Agreement. It is his contention that since the sale was at the ex-factory/refinery, there was no question of incorporating freight element in the transaction value. But, in view of Clause 5.4 of the Agreement, the OMCs were entitled to a reduction from the basic price equivalent to notional rail freight payable from NRL to New Jalpaiguri Railways Station. Further, he has submitted that reduction/discount given in the transaction value, was not on account of any subsequent event, but for factors prevalent at the time of clearance of the goods. Such a reduction from the price is admissible. In his support, he has referred to the judgement of the Larger Bench of this Tribunal in the case of CCEx Vs. Victory Electricals Ltd. 2013 (298) ELT 534 . 8.1 Heard both sides and perused the records. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eproduced as below: ARTICLE 5 : PRICING FOR INTER-PARTY TRANSACTIONS 5.1 Basic price of product for road, rail and pipeline deliveries ex-coastal Refineries shall be the Import Parity Price (IPP) at the dispatching refinery port, to be calculated as per the formula given in Annexure D as applicable on the date of completion of loading. 5.2 Basic Price for coastal deliveries ex-coastal Refinery shall be the Import Parity Price as per Annexure D applicable to the destination port as on the date of completion of loading at the refinery port, reduced by the amount of applicable wharfage charges at the destination port, insurance, ocean losses included in the Import Parity Price of the destination port and also wharfage, if any actually incurred at refinery port and notional freight from refinery port to destination port as per formula stipulated in clause (t) of Annexure B. In such a case, the billable quantity shall be determined as the basis of quantity delivered as measured in shore storage tanks at the loading location for products. In case the product purchased from coastal refinery is billed to one Marketing Oil Company and subsequently shared at destination l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto account the receipts and deliveries of these products by each Oil Marketing Company, if there are any under recoveries of the supplying Oil Marketing Companies, the same shall be jointly taken up with the Government. 8.4 The agreed price between the parties varied in accordance with the circumstances and with reference to the Import Parity Price. For the present issue, the condition mentioned at Article 5.4 of the said agreement is relevant. It is agreed under the said Article that the basic price of products for sales ex-North Eastern Refineries shall be reduced by the notional rail freight from the supplying refinery to New Jalpaiguri (NJP). Rail freight for the movement beyond NJP shall be borne by the OMC buying the product from the NE refineries. Initially, it was interpreted that the respondent had claimed refund of freight charges from refinery to New Jalpaiguri (NJP) Rail head and accordingly observed that as the respondent could not place evidences in support of incurring of the freight, hence the refund was rejected. The said understanding perhaps contributed by the work-sheets submitted by the respondents in support of the refund claim, where against the respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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