BPCL Vs. COMMISSIONER OF CENTRAL EXCISE, COCHIN

JUDGEMENT

(1.) THE common issue raised in this appeal is whether licence fee is to form part of the assessable value of petroleum products sold by the assessee.

(2.) FACTS of the case are that appellants sell High Speed Diesel oil and Motor Spirit to their dealers at a fixed sale price. Appellants also own outlets for retail sale of the same. These are leased out to their dealers who sell Motor Spirit (MS) and High Speed Diesel (HSD) oil from these outlets. The lease charges depend upon the items under lease. No lease charge is levied from the buyers who are not lessees of appellants outlets. The following table brings out the factual position : - Motor Spirit (MS)High Speed Diesel (HSD) Company owned Outlet - All assets viz. Land, Building, Pumps and tanksRs. 43/ -Rs. 36/ - Dealer Controlled Outlet - Only Tanks and pumps owned by Oil CompanyRs. 13/ -Rs. 11/ - Outlet where the Dealer leases the site/building/tanks and pumpsNilNil

(3.) ƒThe contention of the appellants is that licence fee is entirely related to lease of outlets and machinery installed therein and has no connection whatsoever with the sale of MS and HSD oil by the appellants to the dealers. They, therefore, contend that licence fee has no relevance to the pricing and assessment of MS and HSD oil. The appellants have relied on the decision of the Tribunal in the case of HPCL v. CCE, Hyderabad - 2002 (149) E.L.T. 1294 and the decision of the Apex Court in the case of Indian Oxygen v. CCE - 1988 (36) E.L.T. 730 (S.C.)