2009 (9) TMI 497 - AT - Central Excise

Valuation- Stock transfer- the issue involved is regarding value of the products manufactured and cleared by the appellants from the refinery to the Company s party. It is the submission that duty has been discharged on the price fixed by APM. The department alleged that the appellant had cleared the goods without determining the correct transaction value by not adopting the price prevalent at the Company Owned and Company Operated Outlets (COCO). In the light of the decision of Bharat Petroleum Corporation Ltd. v. CCE, Commissioner (Appeals) confirmed the demand. Held that- we set aside the impugned order and the appeal is allowed.

Summary

The App-Michaels are a company engaged in warehousing and marketing of petroleum products. They clear products on a stock transfer basis to company-owned and company-operated outlets (COCO) on payment of duty on external prices. The valuation rules are applicable in this case, and the assessable value for payment of CE duty should be the price at which COCOs sell the products, as the difference between the sale price at the COCO and the warehouse is collected by the appellant. The appellant cleared goods without determining the correct transaction value, leading to a show cause notice for demanding differential duty, interest, and penalties. The appeal is directed against the Order-in-Appeal No. 3/2006 CE, passed by the Commissioner of Customs & Central Excise (Appeals-IT), Hyderabad, which was upheld subject to modification of redemption fine and penalty by the Commissioner (Appeals). The issue involved is regarding the value of products manufactured and cleared by the appellants, and the department alleged that the correct transaction value was not adopted. The Tribunal decided in favor of the appellant, citing a previous case involving Bharat Petroleum Corporation Ltd. The appeal was allowed with consequential relief, setting aside the impugned order. The judgment was pronounced and dictated in court by S/Shri M.V. Ravindran and P. Karthikeyan.