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TMI Blog2017 (2) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by the relationship between KRL and BPCL - From the chart submitted by KRL, it is seen that KRL has supplied the same product PIB not only to BPCL but also to other OMCs such as IOCL, HPCL, IBP, etc. During the disputed period, the product has been supplied at the same price to various other OMCs as for BPCL. Appeal allowed - decided in favor of assessee. - E/734/2006-DB & E/333/2007-DB - Final Order No. 20217 - 20218 / 2017 - Dated:- 7-2-2017 - Shri S. S. Garg, Judicial Member And Shri V. Padmanabhan , Technical Member Mr. Sandeep Gopalakrishnan, Advocate For the appellant Mr. N. Jagadish, AR For the respondent ORDER Per V. Padmanabhan The present appeals have been filed by assessee as well as Revenue agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the learned Commissioner has imposed penalty under Section 11AC only to the extent of ₹ 15,00,000/-, as against the mandatory penalty under Section 11AC for an amount equal to the Central Excise duty not paid. 3. The grounds on which KRL has challenged the impugned order are summarised below: (i) The price of the goods sold to BPCL was based on the contract awarded to KRL consequent upon KRL being the lowest bidder in the tender procedure for supply of PIB. The same commodity is also being sold by KRL to various OMCs, which are all Public Sector Undertakings (PSUs). They submitted a chart showing that the prices of PIB are sometimes less than the price at which the goods have been sold to BPCL. There are also instances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) which was confirmed by the Supreme Court in 2006 (193) ELT A197 (SC). (ii) CCE, Chandigarh vs. Bharti Telecom Ltd.: 2008 (226) ELT 3 (SC) (iii) CCE, Mumbai vs. Universal Luggage Mfg. Co. Ltd.: 2005 (190) ELT 3 (SC) 4. With above background, we heard Shri Sandeep Gopalakrishnan, advocate for the assessee (KRL) and Shri Parashiva Murthy, DR appearing for the Revenue. 5. The learned advocate reiterated the grounds of appeal in detail. He argued that even though both KRL as well as BPCL are related parties, the transaction value merits to be accepted inasmuch as the supply to BPCL has been made at prices determined through competitive bidding process. 6. Learned DR supported the impugned order and argued that once the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for procurement of goods. Such procedure is mandated with the objective of transparency in procurement and the possibility of lowest price discovery by open competition. Since the price of procurement of PIB for supply to BPCL has been decided by such an open tender procedure, it cannot be said that the transaction value has been influenced by the relationship between KRL and BPCL. From the chart submitted by KRL, it is seen that KRL has supplied the same product PIB not only to BPCL but also to other OMCs such as IOCL, HPCL, IBP, etc. It is further seen that during the disputed period, the product has been supplied at the same price to various other OMCs as for BPCL. Further, there are also instances where KRL has supplied the same produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner has adopted the highest of the prices at which KRL has sold the same commodity to other OMCs. As discussed earlier, we are taking the view that the transaction value is acceptable during the disputed period in respect of clearances made to BPCL. Accordingly, in our view there is no necessity to resort to determination of value under Section 4(i)(b) read with Central Excise Valuation Rules. Consequently, we do not consider it necessary to discuss in detail the grievance of KRL in terms of the procedure adopted in the impugned order. For the same reason, we are also not discussing the arguments raised on the ground of time bar. 8. In view of the above discussions, the impugned order is set aside and the appeal filed by KRL is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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