Valuation of MS and HSD sold amongst OMCs - MOU -regarding - Central Excise - F. No. 6/21/2003-CX.I (Pt)

F. No. 6/21/2003-CX.I (Pt) Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs Dated 14th February, 2007 . Subject:- Valuation of MS and HSD sold amongst OMCs - MOU -regarding. Sir, I am directed to say that with effect from 1.4.2002, the APM was dismantled and Oil Coordination Committee (OCC) was dissolved. In view of the infrastructural, operational and logistic constraints and to ensure the regular supply of the petroleum products, the Oil PSUs entered into MOUs at the behest of Ministry of Petroleum and Natural Gas, whereby any Oil Company having a warehouse/refinery at any location was obliged to exchange the products with other Oil companies as per logistic plan at mutually agreed price. 2. CERA had raised objection and SCNs were issued to the Oil PSUs on the ground that the transactions of inter PSU sale were not at arms length and that the sale price as per the MOU did not represent the transaction value under Section 4 of the Central Excise Act, 1944. 3. CESTAT, Bangalore in the case of CCE Vishakhapatnam vs HPCL has held vide Order No.306,307 dated 28.2.2005 [2005(187)ELT 479(Tri.Bang.)] that the sale price as per the MOU correctly represented the transaction value. SC has dismissed the Civil Appeal filed by the Department against the CESTAT order. 4. It has been decided that said pending cases and future assessment of said products should be decided based on above order. Cases pending in call book may also be decided accordingly. However, the facts of the case decided by the Tribunal may be gone through properly in order to apply to these pending cases, as well as to future assessments. Sd/- (Gaurav Sinha) Under Secretary (CX. I)