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2016 (8) TMI 496 - CESTAT AHMEDABAD

2016 (8) TMI 496 - CESTAT AHMEDABAD - TMI - Valuation - Whether the SKO (PDS) cleared to Oil Marketing Companies has to be valued on the basis of transaction value on which the goods are sold to OMCs or the price at which the OMCs sold the goods to the ultimate customers - clearance of SKO (PDS) reflecting two prices on the excise invoices but paid excise duty on the lower price i.e. the price at which OMCs sold the goods to the consumers - Held that:- by relying on the judgment of Tribunal Larg .....

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ed in respective invoices mentioning two prices and the duty had been discharged on the lower price, hence, we do not find merit in the contention of the Revenue that in all the invoices both the prices were not reflected. - Appellant's as well as Revenue's appeal rejected - Appeal No. E/1348/2007, E/57/2008 [Cross Objection - E/CO/24/2008] - ORDER No. A/10679-10680/2016 - Dated:- 25-7-2016 - Dr. D. M. Misra, Hon'ble Member (Judicial) And Mr. P. M. Saleem, Hon'ble Member (Technical) For .....

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arehouse and engaged in receiving SKO (PDS) under bond from IOCL (Gujarat Refinery, Vadodara) and clearing the SKO (PDS) to Oil Marketing Companies on payment of duty. It was alleged by the department that during the period from 01.12.2001 to 05.09.2004, the appellant had undervalued the product namely, SKO (PDS) cleared to Oil Marketing Companies resulting into short payment of duty. Consequently, a show cause notice was issued to the appellant on 12.03.2007 invoking extended period of limitati .....

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me up before this Tribunal against dropping of demand and penalty by the adjudicating authority on the ground of time bar. Both the Appeals are taken up together for disposal. 3. Ld. Advocates Shri T.C. Nair and Ms.M.M. Patil for the appellant-assessee submitted that even though the decision of this Tribunal in the case of Oil and Natural Gas Corporation Limited vs. CCE, Raigad 015-TIOL-1960-CESTAT-MUM-LB ruled that the transaction value at which the LPG had been sold by ONGC for the period June .....

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sion of the Tribunal before the Hon ble Supreme Court and if any Stay has been granted thereon. 4. Ld. A.R. for the Revenue, on the other hand, submitted that by a majority, in the aforesaid decision of the Larger Bench of Tribunal, it has been categorically held that duty is required to be discharged on the transaction value collected from OMCs by issuing commercial invoice and not on the price at which the OMCs sold the goods to ultimate customers. It is his contention that the issue is theref .....

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the appellant has made clearance of SKO (PDS) reflecting two prices on the excise invoices. It is his contention that even though the price at which the goods were sold to OMCs and the price at which the excise duty was paid, claimed to have been reflected in the invoices; however, the same was not for the entire period of demand. It is his contention that since all the facts were not disclosed to the department, thus, there is an element of suppression and accordingly, extended period of limita .....

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Tri. Ahmd.). 6. In response, the ld. Advocate for the assesse has submitted that in the excise invoices two prices had been invariably reflected, namely, the price at which the goods was sold to OMCs and the price at which the goods were ultimately sold by the OMCs to the buyers. For the purpose of determination of value and discharge of duty the later price was adopted by them. It is his contention that on this very premise the show cause notice was issued to them. To support his argument the l .....

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o the decisions of the Hon ble Supreme Court in the case of Chemphar Drugs 1989 (40) ELT 276 (SC), Padmini Products vs. Collector of Central Excise 1989 (43) ELT 195 (SC), Larson & Toubro vs. UOI- 2007 (211) ELT 513 (SC) and CCE,Chenai-I Vs.Chennai Petroleum Corporation Ltd. 2007 (211) ELT193(SC) . 7. Heard the both sides and perused the records. We find force in the contention of the Ld. A.R. for the Revenue as far as merit of the case is concerned; the Tribunal Larger Bench in ONGC s case, .....

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o the ultimate customers in the respective excise invoice but paid excise duty on the lower price i.e. the price at which OMCs sold the goods to the consumers. The said judgment is binding on us. Therefore, the appellant has no case on merit and accordingly their Appeal is liable for rejection. 8. Regarding the Revenue s Appeal on the time-bar issue, we find that Ld. Commissioner after analysis of the facts and evidence on record has recorded detailed findings advancing cogent reasons as to why .....

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evade the payment of duty but, there is no evidence whatsoever in this regard. It has also been pleaded that the Assessee had never suppressed any facts in so far as valuation of SKO was concerned; that the department was well aware that the excise duty was payable only on assessable value of SKO fixed by the Ministry of Petroleum & Natural Gas and it was clear that the departmental authorities were aware of the fact that the Assessee were paying duty on the assessable value fixed by the Mi .....

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urse of which the invoices had been examined and no objections had been raised; and that the Assessee was a Public Sector Undertaking. 10. On going through the records in this case I find that in his case it is true that the Assessee were paying duty on the basis of assessable value which was being communicated to them by the Ministry of Petroleum & Natural Gas. It is a different matter that the practice being followed by the Assessee was not in conformity with the provisions of Section-4 of .....

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Excise records some selective scrutiny of Central Excise invoices and commercial invoices is also required to be done without which such audit would be meaningless. In view of this the department cannot claim that it was not aware of the fact that there were two prices mentioned on the Central Excise invoices, one price on which the Central Excise duty was calculated and the other price which was being actually charged from the customers. I, therefore, hold that the allegation against the Asses .....

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o Section-11 A (1) of the Central Excise Act, 1944 is not available to the department in this case. 9. From the allegations levelled in the show cause notice, we find that the very basis for alleging short payment of duty against the appellant was that the appellant had, though reflected the transaction price with the OMCs and also the price at which the OMCs sold the goods to customers in the respective invoices, but chose to discharge duty only on the lower value i.e. the price at which the go .....

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supra) their Lordships observed as: 8….. In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, .....

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n of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts referred to hereinbefore do not warrant any inference of fraud. The assessee declared the goods on the basis of their belief of the interpretation of the provisions of the law that the exempted goods were not required to be included and these did not include the value of the exempted goods which they manufactured at the relevant time. The Tribunal found that the explanati .....

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l itself as being based on no evidence. In Chennai Petroleum Corporation s case(supra) taking note of the fact that the assesse therein was a public sector undertaking, their Lordships observed as: 7. The question still remains as to whether the Department was right in invoking the extended period of limitation under Section 11A of the Central Excise Act. In this connection, we are of the view that there was no suppression on the part of the assessee. As stated above, the assessee is a Public Se .....

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