2003 (9) TMI 168 - AT - Central Excise

Summary

Issues:
Whether license fee should form part of the assessable value of petroleum products sold by the assessee.

Analysis:
The case involved the question of whether the license fee should be included in the assessable value of petroleum products sold by the appellants. The appellants sold High Speed Diesel oil and Motor Spirit to their dealers at fixed prices and leased outlets to these dealers for retail sales. The lease charges were based on the items under lease, and no charge was levied from buyers who were not lessees of the outlets. The appellants argued that the license fee was related to the lease of outlets and machinery and not connected to the sale of petroleum products. They cited precedents to support their position.

Upon reviewing the facts and submissions, the tribunal found that the leasing of outlets and the sale of petroleum products were distinct transactions. Notably, no license fee was charged from dealers who did not lease the outlets. Therefore, the tribunal held that the license fee, being a separate consideration, should not be included in the assessable value of the petroleum products. The tribunal also referenced previous decisions that supported the appellants' position.

Consequently, the tribunal allowed the appeals, providing consequential relief to the appellants. The judgment clarified that the license fee, being unrelated to the sale of petroleum products, should not be considered in determining the assessable value.