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2016 (8) TMI 496 - AT - Central ExciseValuation - Whether the SKO (PDS) cleared to Oil Marketing Companies has to be valued on the basis of transaction value on which the goods are sold to OMCs or the price at which the OMCs sold the goods to the ultimate customers - clearance of SKO (PDS) reflecting two prices on the excise invoices but paid excise duty on the lower price i.e. the price at which OMCs sold the goods to the consumers - Held that - by relying on the judgment of Tribunal Larger Bench in the case of Oil and Natural Gas Corporation Limited vs. CCE, Raigad 2015 (11) TMI 1038 - CESTAT MUMBAI (LB) wherein after detail analysis of principle of law on the subject and relevant circulars issued by the Board from time to time held that excise duty is required to be paid on the transaction value collected from the OMCs by issuing commercial invoices. Invokation of extended period of limitation - Demand of duty shortly paid - Held that - as the facts were fully disclosed in respective invoices mentioning two prices and the duty had been discharged on the lower price, hence, we do not find merit in the contention of the Revenue that in all the invoices both the prices were not reflected. - Appellant s as well as Revenue s appeal rejected
Issues involved:
1. Determination of assessable value for excise duty purposes. 2. Applicability of extended period of limitation for demand of duty. Issue-wise Detailed Analysis: 1. Determination of Assessable Value for Excise Duty Purposes: The primary issue revolves around the correct determination of the assessable value for the purpose of excise duty. The appellant, M/s. Indian Oil Corporation Limited, was accused of undervaluing SKO (PDS) cleared to Oil Marketing Companies (OMCs) from 01.12.2001 to 05.09.2004, leading to a short payment of duty. The department argued that the appellant should have adopted the transaction value at which the goods were sold to OMCs rather than the price at which OMCs sold the goods to customers. The Tribunal referred to the Larger Bench decision in the case of Oil and Natural Gas Corporation Limited vs. CCE, Raigad, which ruled that the transaction value collected from OMCs by issuing commercial invoices is relevant for determining the assessable value. The Tribunal found the facts of the present case similar to the ONGC case and held that the appellant had no case on merit, thereby rejecting their appeal. 2. Applicability of Extended Period of Limitation for Demand of Duty: The second issue concerns whether the extended period of limitation could be invoked for the demand of duty. The Commissioner had dropped the demand on the ground of limitation, stating that the appellant had not suppressed any facts and that the department was aware of the two prices mentioned in the invoices. The Tribunal upheld the Commissioner’s decision, noting that the appellant had disclosed all relevant facts in the invoices and that the department had conducted periodic audits without raising objections. The Tribunal cited several Supreme Court decisions, including Chemphar Drugs and Chennai Petroleum Corporation Ltd., to support the view that extended limitation could not be invoked without evidence of suppression of facts with intent to evade duty. The Tribunal concluded that the Revenue's appeal on this issue was devoid of merit. Conclusion: The Tribunal rejected both the appeals filed by the assessee and the Revenue. The Tribunal held that the appellant had no case on merit regarding the determination of assessable value and that the extended period of limitation could not be invoked due to the absence of suppression of facts. Both the appeals were dismissed, and the cross objections were disposed of.
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