2023 (8) TMI 993 - AT - Central Excise

Valuation - determination of assessable value of stock-transferred petroleum products by the Appellant from their Refinery to Marketing Division - terminalling Charges shown in the Stock-Transferred Invoices when the said goods were transferred from their Refinery to their Marketing Division - HELD THAT - There are force in the argument of the Appellant. There cannot be any sale or purchase between the depots/marketing Division and the Refinery of the same Division. The transaction between the Refinery and the Marketing Division was not a sale. Just because the Terminalling Charges are shown separately in the stock-transferred invoices, it does not mean that central excise duty is payable on that charges. The final sale took place at the Marketing Division, on the Transaction value, which includes all charges incurred upto the Marketing Division, including the 'Terminalling Charges'. Hence, duty has been discharged by the Appellant on the transaction value, which includes the 'Terminalling Charges' also. No evidences has been brought on record by the Revenue to rebut the claim of the Appellant that the Terminalling Charges were included in the transaction value at which the petroleum products were sold by their Marketing Division. In the absence of any such evidence, the allegation that duty has not been paid on the 'Terminalling charges' is not sustainable. The demands of duty along with interest confirmed in the impugned order are not sustainable. Since, the duty itself is not sustainable the question of imposing penalties does not arise - impugned order set aside - Appeal allowed.

Summary

Issues involved:
The determination of assessable value of stock-transferred petroleum products by the Appellant from their Refinery to Marketing Division and the liability to duty on 'Terminalling Charges' shown in the 'Stock-Transferred Invoices'.

Summary:
The Appellant, a company, had transferred petroleum products from their Refinery to their Marketing Division for stock-transfer, mentioning 'Terminalling Charges' separately in the invoices. The Department alleged that duty should be paid on these charges as they were ultimately collected from customers. The Appellant contended that the charges were included in the final sale price at the Marketing Division and duty had already been paid on the transaction value. The dispute revolved around whether the transfer was a sale and if duty was payable on the 'Terminalling Charges'.

The Appellant argued that there was no sale between the Refinery and Marketing Division, and the charges were shown separately to measure profits at different units. They maintained that duty had been discharged on the transaction value, which included the 'Terminalling Charges', hence no additional duty was payable.

The Revenue contended that duty should be imposed on the charges as they represented additional consideration, and duty had been paid on similar transactions with other Oil Marketing Divisions. The Tribunal examined the case and found in favor of the Appellant, stating that no sale occurred between the units of the company and duty had been paid on the transaction value inclusive of the 'Terminalling Charges'. The demands for duty were deemed unsustainable due to lack of evidence against the Appellant's claim.

Therefore, the impugned order demanding duty on 'Terminalling Charges' was set aside, and the appeal filed by the Appellant was allowed. No penalties were imposed as the duty itself was found to be not sustainable.