RELIANCE INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE two appeals are directed against the orders -in -original dated 17/07/2006 and 27/07/2006 which confirmed the demand and imposed penalties on the appellant. Since the issue involved in both the appeals is identical except a small portion, both the appeals are disposed off by a common order.

(2.) COMMON issue that arises in both the appeals is whether the amount of subsidy on the sale of Superior Kerosene Oil (SKO) and LPG received by the appellant from the oil marketing company is includible in the assessable value for confirmation of the differential demand of duty. In Appeal No. E/77/06 an additional issue is regarding the confirmation of demand of duty on the appellant for non -production of proof of payment of duty by the Indian Oil Corporation in respect of the petroleum products transferred under bond through pipe lines.

(3.) THE learned advocate appearing for the appellant submits that the prices of SKO and LPG are controlled under the Essential Commodities Act. It is his submission that Central Government decides the price at which these two products will be sold by the appellant and that also through the oil marketing companies only. It is his submission that ex -refinery price and ex -storage price of both the commodities having been regulated by the government price control mechanisms, they are compensated by the Central Government for the difference between the ex -refinery price and ex -storage price. It is also submitted that the ex -refinery price of these products is also decided by the Central Government and the appellant is not at liberty to charge different price. It was also submitted that the compensation given by the oil marketing companies to the appellant is not additional consideration but a subsidy given out from the Consolidated Fund of India and hence cannot be considered as additional consideration for sale of the these products. For this proposition he relies upon the decisions of the larger bench of the tribunal in the case of Gas Authority of India Ltd., v. C CEX, Vadodara as reported at and final order No 1893/2006 dated 10.11.2006 of the tribunal in the case of Mangalore Refinery and Petrochemicals Ltd., v. C CEX., Mangalore. As regards the issue of demand of duty on the non -submission of the proof of payment of duty on the goods cleared under Bond it is his submission that IOCL had diverted the petroleum products cleared in pipelines to their another refinery, but now the duty liability has been discharged by IOCL. He produces the certificates given by IOCL countersigned by jurisdictional Range officer.