2018 (12) TMI 423 - AT - Central Excise

Valuation - Motor Spirit - High Speed Diesel - appellant paid duty on the quantity of goods cleared and sold through their own depots, on the basis of the price per kilo liter for volume at ambient temperature - Since the volume of goods at 15 C will be lesser than the volume of the same products at ambient temperature, the department proceeded by taking the view that the appellant has short paid the duty. Held that - An identical dispute pertaining to the appellant s refinery at Ambala was before the Delhi Bench of the Tribunal and has been decided in favor of the appellants in INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX.. PANCHKULA 2013 (1) TMI 526 - CESTAT, NEW DELHI , where it was held that the appellant has rightly paid the excise duty as per transaction value in terms of Section 4 of the Central Excise Act and there is no justification for allegation of under-valuation of the goods with a view to evade excise duty Appeal allowed - decided in favor of appellant.

Summary

Issues:
Dispute regarding valuation for payment of duty on Motor Spirit and High Speed Diesel cleared from Barauni refinery.

Analysis:
The appellant cleared products to its depots at ambient temperature, but to other companies at 15°C, leading to a lesser price. The department alleged undervaluation and issued a show cause notice for demanding differential duty. The impugned order confirmed the demand. The appellant argued no intention to evade duty, stating contracted prices with other companies were based on volume at 15°C, resulting in no revenue loss. The appellant cited a favorable decision by the Delhi Bench in a similar case. The department justified the impugned order.

The dispute centered on the duty payment value for Motor Spirit and High Speed Diesel. The appellant paid duty based on ambient temperature volume for own depots but at 15°C for other companies, leading the department to claim underpayment. The appellant argued contracts with other companies were based on 15°C volume. A similar case at the Delhi Bench favored the appellant, emphasizing the transaction value as per Section 4 of the Central Excise Act. The Tribunal's decision was upheld by the High Court, leading to the current appeal's allowance.

In conclusion, the Tribunal found the impugned order unsustainable, setting it aside and allowing the appeal based on the precedent set by the Delhi Bench and affirmed by the High Court. The appellant's duty payment method was deemed in compliance with the Central Excise Act, with no under-valuation observed.