COMMISSIONER OF CENTRAL EXCISE, VISAKHAPATNAM Vs. BPCL

JUDGEMENT

(1.) APPEAL Nos. E/915/2006, E/916/2006, E/917/2006 and E/52/2007, are by the department with Bharath Petroleum Corporation Ltd. Visakhapatnam, IOCL Ltd. Visakhapatnam, HPCL Ltd. Visakhapatnam and IOCL Ltd. Visakhapatnam, respectively as the respondents. 1.2 The above four appeals by the department are against the common Orders -in -Appeal No. 44 to 47/2006, dated 20 -1 -2006 passed by the Commissioner of Central Excise and Customs, Visakhapatnam. All these appeals involve substantially the same facts and issues and are accordingly dealt with by this common order.

(2.) HEARD both sides extensively.

(3.) 1 The relevant facts in Appeal Nos. E/915/2006 (period involved is July, 2002 to March, 2002), E/916/2006 (period involved July, 2000 to March, 2002 and E/57/2007 (period involved is July, 2000 to October, 2002) are identical and the same are as follows : (a) The oil companies are receiving petroleum products from various refineries located at different places in India, under bond without payment of duty at their terminal points. The petroleum products are, thus, stored at these terminal points without payment of duty. (b) The oil companies appoint dealers for sale of Motor Spirit and High Speed Diesel Oil. They also establish company owned company outlets (hereinafter referred as COCOs) as per oil Co -ordination Committee guidelines for sale of Motor Spirit and High Speed Diesel Oil. (c) These petroleum products are cleared on payment of duty from the said terminal points. The clearances at the terminal points are two -fold namely, sale to dealers and clearances to COCO outlets. (d) The prices of petroleum products to the dealers were determined under the Administered Price Mechanism i.e. APM till 31 -3 -2002 and from 1 -4 -2002 they were sold at prices decided by the oil marketing companies themselves. Under APM, the price to dealer and retail price to the consumer are fixed and the same specifically indicated dealers margin and delivery charges (i.e. charges towards transportation and incidentals). (e) The respondents have transferred the petroleum products from terminal points to COCO outlets on payment of duty at the same assessable value as in the case of sales to dealers. The amounts representing the profit margin and delivery charges applicable in respect of sales to dealers while APM was in force was thus excluded. From 1 -4 -2002, the transaction value applicable in respect of dealers excluding delivery charges was adopted for payment of duty on the petroleum products transferred from terminal points to COCO outlets. (f) Original authority has held that the assessable value in respect of goods transferred from terminal points to COCO outlets and sold from there, should include the transportation/transfer charges and demanded differential duty and imposed penalties. (g) However, the Commissioner (Appeals) has held that the amounts representing the transportation/transfer charges could not be added to the assessable value and allowed the appeals preferred by the parties. 3.2 The relevant facts, in Appeal No. E/917/2006, are that the respondents cleared propylene to M/s. Andhra Petrochemicals Ltd. located in the adjacent premises through pipeline. They have collected Rs. 50/ - per MT towards delivery charges. The original authority included the said amount in the assessable value and demanded differential duty and imposed penalties. The Commissioner (Appeals) has set aside the order of the original authority.