2015 (10) TMI 1681 - AT - Central Excise

Duty demand - Valuation - Inclusion of delivery charges and road freight subsidy charges collected from the customers - Held that - In an identical issue the Tribunal in the appellant s own case relating to Mangalore Central Excise reported in 2006 (7) TMI 495 - CESTAT, BANGALORE has allowed their appeal and the Hon ble Supreme Court dismissed the civil appeal filed by Revenue as reported in 2007 (5) TMI 600 - SUPREME COURT - adjudicating authority demanded excise duty on delivery charges and road freight subsidy charges collected from the customers and the place of removal is depot and the appellants are governed by the administrative price mechanism which was in vogue during this period and these charges are not includible in the assessable value of petroleum products. - Accordingly, the impugned order is set aside - Decided in favour of assessee.

Issues:
1. Inclusion of delivery charges and road freight subsidy charges in the assessable value of petroleum products.
2. Applicability of the administrative pricing mechanism during the relevant period.
3. Interpretation of the definition of place of removal under the Central Excise Act.
4. Precedent set by previous Tribunal and Supreme Court decisions.

Analysis:
1. The case involves the non-inclusion of delivery charges and road freight subsidy charges in the assessable value of petroleum products cleared from a warehouse. The appellant stored non-duty paid products and discharged central excise duty. The adjudicating authority confirmed a demand for excise duty and imposed a penalty on the appellant. The issue centers on whether these charges should be part of the assessable value.

2. The period in question, April 2002 to January 2003, saw the administrative pricing mechanism in practice. The Tribunal referred to a previous case where it was established that charges collected from customers were not includible in the assessable value of petroleum products. The Tribunal highlighted that the price applicable to dealers at the place of removal, i.e., terminal points, was adopted, whether based on the administrative pricing mechanism or self-determined by oil marketing companies.

3. The Tribunal examined the definition of place of removal under the Central Excise Act, emphasizing that during the relevant period, the COCO outlets were not considered the place of removal. The Tribunal differentiated between depots and retail outlets, concluding that the COCO outlets were retail outlets and not depots. This distinction was crucial in determining the correct place of removal for excise duty purposes.

4. Precedent played a significant role in the judgment, with the Tribunal citing a case where the appellant's appeal was allowed, and the Supreme Court upheld the decision. By following the Supreme Court and Tribunal decisions, the Tribunal set aside the impugned order and allowed the appeal. The judgment established that the demand for excise duty on delivery charges and road freight subsidy charges was not sustainable based on the legal precedents and interpretations provided.

This comprehensive analysis of the judgment delves into the core issues of the case, providing a detailed understanding of the legal reasoning and precedents relied upon by the Tribunal in reaching its decision.

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