TMI Blog2015 (3) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... g, etc. and one lump sum amount is charged which is inclusive of excise duty. The appellant’s claim to the contrary is not evident from the invoices raised as there is no mention in these invoices of any charges towards transportation, handling etc. In these circumstances, the contention of the appellant that these are towards transportation and handling charges cannot be accepted. Since the sale takes place at ONGC Nhava Depot, that is the place relevant for determination of the transaction value in terms of Section 4(1)(b) read with Rule 7. Therefore, notwithstanding the fact that depot was not included as a place of removal, prior to 14-05-2003, the appellant has no case at all. After 14-5-2003, the price at the ONGC depot is clearly the value on which duty liability has to be discharged. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January, 2001 to 5-9-2004 demanding Central Excise duty of ₹ 43,72,070/-. The said notice was adjudicated vide order dated 28-2-2007 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 the appellant submits that during the period prior to 14-05-2003, the depot was not a place of removal under Section 4(3)(c) and therefore, the warehouse from where the goods were cleared is the place of removal and hence, the stock transfer price at the warehouse would be relevant for the purpose of demand of duty. Thus, a demand of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of this Tribunal in the case of CCE, Chennai v. Madras Refineries Ltd. - 2007 (207) E.L.T. 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 assessee. Therefore, it is prayed that the 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 referred to such as such other place ) 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 said goods are not related and the price is the sole consideration for sale, the value shall be the normal transaction value of such goods sold from such other place at or about the same time and where such goods are not sold at or about the same time, at the time nearest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ..) Sd/- (P.R. Chandrasekharan) Member (Technical) 8 . [Order per : Anil Choudhary, Member (J)]. - 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 of the documents like purchase orders issued by ONGC to IOCL for supply of petroleum products, it is evident that there is stipulation to pay additional delivery charges for delivery upto ONGC Barges/Jetty. The terms of delivery is mentioned as door deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was further stated that with respect to sales effected 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 price and transaction value was ascertainable under Section 4(1)(a) of the Act, then all removals including from depot were required to be assessed at that price only and the price charged from Nhava depot to ONGC Jetty/Barges was of no consequence for the purpose of valuatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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. Sd/- (Anil Choudhary) Member (Judicial) 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 the hon ble Member (Technical) in terms of Section 4(1)(b) read with Rule 7 of the Central Excise Valuation Rules, 2000, relying on the decision of this Tribunal in the case of VIP Industries Ltd. - 2012 (275) E.L.T. 602 and Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 which was higher than that charged in the warehouse. For sale from the depot, the appellant was collecting other charges at the rate of ₹ 172.54 per kilolitre. These charges were meant to recover the additional cost that the appellant was incurring in transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 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 handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. 17. It is to be noted that clause (iii) in above mentioned Section 4(3)(c) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 referred to as such other place ) from where the excisable goods are to be sold after their clearance from the place of removal and where the assessee and the buyer of the said goods are not related and the price is the sole consideration for the sale, the value shall be the normal transaction value of such goods sold from such other place at or about the same time and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 v. Madras Refineries Ltd. reported in 2007 (207) E.L.T. 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 not declared the material particulars to the department and, therefore, penalty is also imposable under the provisions of Section 11AC as held by the Member (Technical), or extended period of time is not invokable as there is no element of suppression or mis-declaration attrib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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