9911796707
TMI Blog2024 (10) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1,82,574/- for July 2012 to January 2013 and February 2013 to December 2013 under section 11A of Central Excise Act, 1944, along with applicable interest under section 11AB of Central Excise Act, 1944, and penalty of like amount under section 11AC of Central Excise Act, 1944, by affirmation of order of original authority. 2. The appellant supplies 'compressed natural gas (CNG)' to several bulk purchasers, among which are, Thane Municipal Transport Undertaking for use in buses and vehicles operated by them, and for which, owing to the nature of the product, dispensing occurs at the premises of the customer. In terms of the contract with such bulk purchasers, certain discounts are offered and the jurisdictional central excise authorities p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g as those are based purely on commercial consideration, where buyer and the seller are not related and price is the sole consideration for sale at the time and place of delivery. Thus, it enables valuation of goods for excise purpose on the value charged as per normal commercial practices, rather than looking for a notionally determined value which existed prior to amendment of Section 4 in 2000. The Adjudicating Authority has confirmed the demand on the differential value between MGL's sales price from their own outlets and/or the outlets of PPs and the sales price of MGL to OMCs, treating the difference as the charges for the services rendered by OMCs to MGL and the Department also claims that sale is not taking place between the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me amount received by OMCs from MGL, claiming such amount as commission paid for rendering of services under Business Auxiliary Service for marketing of CNG manufactured by the appellants, has been set aside holding that the OMCs themselves are buying the goods from MGL and MGL is charging VAT/sales tax while selling the CNG to BPCL/HPCL and BPCL/HPCL are also paying VAT/sales tax on the entire value, including the so-called commission and, hence, the transaction between them is sale/purchase transaction and VAT/sales tax has been paid at both ends the same cannot be considered as service contracts. 5.3 We find that the appellants' contention that OMCs, being bulk buyers, have been given higher discount also needs to be accepted in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r their activity as Business Auxiliary Service and pay service tax on the commission received from MGL. We find that sale of CNG by the appellants to OMCs is on principal-to-principal basis, which is clear from various terms/covenants of the agreements between MGL and OMCs, i.e. retail sales price is the price at which CNG is to be sold to vehicles by the OMC as communicated by MGL to OMCs, from time-to-time; OMC shall sell CNG at the outlets situated at the site; Retail Price of CNG shall be fixed by MGL and the OMCs shall sell the CNG only at the retail price communicated by MGL to OMCs, from time-to-time; OMCs shall pay to MGL the retail price as reduced by profit margin/commission/discount; MGL shall, before 5th of every month, send to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1.40/kg, Rs. 2.42/kg, Rs. 2.62/kg and Rs. 2.74/kg during different periods. From the above discussions, we are of the view that the appellants' case is squarely covered under new Section 4(1)(a) of CEA which essentially permit different transaction values, unlike normal sales price existed prior to 1-7-2000, which has also been explained by C.B.E. & C., vide its Circular No. 354/81/2000-TRU, dated 30-6-2000 in Para 5.' 7. The reliance placed by Learned Authorized Representative on the decision in re Bharat Petroleum Corporation Ltd does not advance the case of Revenue inasmuch as the two transactions therein were held to be akin to barter. Here, it is alleged that money value of the facilities, treated as equivalent to 'trade discount', ..... X X X X Extracts X X X X X X X X Extracts X X X X
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