2002 (7) TMI 126 - AT - Central Excise

Summary

Issues: Valuation of Natural Gasoline Liquid (NGL), Duty Liability, Utilization of credit in RG 23A part II and RG 23C part II, Provisional Assessments, Penalty under Rule 173Q.

Valuation of NGL:
The appellants received NGL from ONGC through IOCL, with a dispute arising over the price charged. The Department alleged that the price charged was higher than the normal price, leading to duty evasion. The appellants argued that the selling price was determined by the Ministry of Petroleum and Natural Gas, varying for different classes of buyers. The Tribunal referenced a previous case to establish that the price of Rs. 1830.36 per MT should be considered for valuation, rejecting the Department's demand for a higher price.

Duty Liability:
The Commissioner found the appellants liable for duty under Section 11A, ordering payment of Rs. 12,38,04,077 along with interest and penalties. However, the Tribunal disagreed with the Commissioner's decision, emphasizing that the duty should be determined based on the end use of the NGL. The appellants' argument that duty payment through RG 23A part II and RG 23C part II was valid was rejected, with the Tribunal ruling that payment should be made through PLA.

Utilization of credit in RG 23A part II and RG 23C part II:
The appellants contended that the duty payment through RG 23A part II and RG 23C part II was revenue neutral and could be reversed through PLA, with the Department's awareness of this practice. The Tribunal acknowledged the appellants' willingness to rectify the situation but mandated payment through PLA for duty discharge.

Provisional Assessments and Penalty under Rule 173Q:
The Commissioner imposed penalties under Rule 173Q, citing provisional assessments and non-disclosure of selling prices by the appellants. However, the Tribunal disagreed, stating that penalties were not warranted for provisional assessments. The appellants' readiness to rectify the duty debits in RG 23A and RG 23C through PLA was noted, leading to the Tribunal setting aside the order and allowing the appeal.

In conclusion, the Tribunal's detailed analysis of the issues surrounding the valuation of NGL, duty liability, credit utilization, provisional assessments, and penalties resulted in a favorable decision for the appellants, emphasizing the importance of accurate valuation, proper duty discharge mechanisms, and compliance with procedural requirements.