TMI Blog2019 (5) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of clearance of goods, is the price nearest to the time of removal at which such goods have been sold. A plain reading of Sec.4 read with Rule 7 would show that clearance at a price nearest to the time of removal would mean the price which will be available to the assessee at the time of removal as being the price at which the goods were sold. It is impossible for the assessee to predict what will be the price after the removal of goods and when such transaction will take place - thus the price to be reckoned is price at which such goods have been sold at the time nearest to the time of removal. The appellant had clearly contravened the provisions of Sec.4 read with Rule 7 of Central Excise Valuation Rules, 2000 without any jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties like M/s Reliance Energy, M/s Spectrum and M/s LANCO. Appellant cleared the goods based on a fixed refinery gate price at the time of clearance. The refinery gate price at which the goods are cleared from the refinery to the depot/terminal is declared for each fortnight. They also include freight charges, state specific charges and siding and shunting charges for the purposes of payment of excise duty. For the period 10.1.2007 to 31.3.2008 DGCEI sent letters and investigated the matter which culminated in issuance of show cause notice dated 12.5.2010. The case of the department is the appellant has cleared Naphtha from the factory declaring a lower value and paying excise duty thereon and subsequently sold it to private parties from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot served on him, no notice under Sec.11A(1) should be served upon the assessee in respect of such duty. Therefore, the show cause notice itself should not have been issued either demanding the duty or interest or proposing to impose penalty under Sec.11AC. The department s appeal is on the ground that the Commissioner has wrongly computed the duty payable. In terms of Rule 7 of the Central Excise Valuation Rules, 2000 where the goods are not sold at the time and place of removal, but are sold subsequently from the depot, the price prevailing at the time nearest to the time of removal should be applied for calculating the amount of excise duty payable. Learned Commissioner has taken the price prevailing prior to the time of clearance of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A(2B), no show cause notice should have been issued to them in the first place and also no penalty under Sec.11AC should have been imposed on them. Therefore, the impugned order needs to be set aside. 5. Learned departmental representative would submit that the words in Rule 7 of Central Excise Valuation Rules, 2000 are the price at the time nearest to the time of removal . It does not indicate that the time should be prior to the time of removal. If the consignment was cleared, say, one hour after the time of removal of the consignment and another consignment was removed, say, three hours prior to the time of removal, the one hour after the time of removal being the nearest to time of removal should be applied. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods and when such transaction will take place. Therefore, we find no infirmity in the order of the learned Commissioner in holding that the price to be reckoned is price at which such goods have been sold at the time nearest to the time of removal. 7. Coming to the contention of the appellant that no show cause notice should have been issued, because they have paid the duty prior to removal of goods, explanation (1) to Sec.11A(2B) states as follows: Nothing contained in this sub-section shall apply in a case where the duty was not levied or was not paid or was short levied or was short paid or was erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts or co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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