AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 1993
X X X X Extracts X X X X
X X X X Extracts X X X X
....eceived from the said OMCs. Necessary documents were enclosed with the said refund claim. 2. 2 A show-cause notice was issued to them on 23rd July, proposing rejection of the refund claim on the ground mentioned therein. The show-cause notice dated 23.07.2004 reproduced as below : "GOVT. OF INDIA OFFICE OF THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, NAGAON. R.K. ROAD. NAGAON (ASSAM); PINCODE-- 782001. Phone # (03672) 235578.237449. FAX (03672) 235778. 237449 SHOW CAUSE NOTICE Whereas it appears thai M/s. Numaligarh Refinery Limited . Panka Urani, P.O. -Refinery Complex. District Golaghat (Assam), holder of Central Excise Number AAACN6984BXD001 (hereinafter referred to as the said assessee) have -vr refund to. the tune of Rs. 4.70.34.371 .00 (Rupees four crores seventy lakhs thirty-four three hundred seventy-one) only in view of the reduced transaction value of the goods. ground that their buyer have not paid the freight charge that incorporated in the assessable value of the goods. However, the assessable value of a good is to be determined by incorporating the freight charge, if the said good is sold at a place other than the place of removal, as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thority and allowed the Appeal with consequential relief to the assessee-respondent. Aggrieved by the said Order, the Revenue is in Appeal. 4. The ld. A.R. for the Revenue reiterating the grounds of appeal, stated that the bone of contention of the Department, is not about the correctness of the transaction value, but the issue raised is, for non-payment of the agreed price by the buyers to the respondent, consequential refund of excise duty paid on the excess price paid at the time of clearance cannot be allowed. Besides, it is also contended that in the event, the transportation cost is wrongly included in the sale price by the respondent, for non-payment of such transportation cost by their customers, the Department is not bound to refund the duty paid on such transportation cost. Assailing the finding of of the Ld. Commissioner (Appeals) that if duty is paid on the higher transaction value then the Department must initiate action suo-moto under section 4 of CEA, 1944, it is submitted that the said observation is contrary to the provisions of Central Excise Act and Rules made thereunder. It is also submitted that when transportation cost was not included in the assessable val....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to this reduction, the price paid/payable by the OMC's , was lesser than the price, on which Excise duty was discharged. 7. It is his contention that that the show-cause notice was issued proposing rejection of the refund claim only on two grounds : (i) Assessable value of the goods have to be determined by incorporating the freight charges if the goods are sold at a place other than the place of removal ; (ii) For breach of Contract of their buyers, the Central Excise Department cannot be held responsible by allowing the refund claim. Hence, now the department cannot make out a new case in challenging the correctness of the transaction value or the transaction value is to be based on price circular etc. in view of the judgement of the Hon'ble Supreme Court in the case of CCEx., Vs. Champdany Industries Ltd. 2009 (241) ELT 481(SC) . 8. He has submitted that on a query from the ld. Commissioner (Appeals), it was clarified by them through their letter dated 22nd December, 2004, and verified by the Range office that the sale of their manufactured goods was ex-refinery/factory gate, hence, first allegation in the show-cause notice, does not survive. It is his submission ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ight charges, when the goods were sold at a place other than the place of removal, and since the contract between the respondent and OMCs conform the said fact of sale of the goods was at a place other than the place of the removal, no refund was admissible. 8.3 On going through the records, we find that the Department itself has gone on a wrong premise from the very beginning, inasmuch as it was considered that the difference in the transaction values was on account of the freight charges between the factory gate and the place of delivery of the goods by the respondents. Both Revenue as well as the respondent have not disputed the fact of sale of the petroleum products were under the Multilateral Product Sale-Purchase Agreement dated 31st March, 2002. Needless to emphasize, the Respondent had agreed to sell the product and the buyers have agreed to purchase the same under the terms and conditions mentioned in the said Agreement. It is relevant to refer to the pricing pattern mentioned under the said Agreement, which is crucial for determination of the present issue ; it is reproduced as below: ARTICLE 5 : PRICING FOR INTER-PARTY TRANSACTIONS "5.1 Basic price o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 30 days i.e. by 30th April, 2002. Any adjustment arising out of the final formula shall be applicable effective 1st April, 2002. 5.4 Basic price of products for sales ex NE refineries shall be reduced by the notional rail freight from the supplying refinery to New Jalpaiguri (NJP). Rail freight for the movement beyond NJP shall be borne by the Oil Marketing Company buying the product from the NE refineries. 5.5 Basic price for sale ex inland locations (other than refineries) including TOPs shall be the import parity price at the nearest port plus freight being recovered tn the selling price at such inland locations. 5.6 Basic price for sale ex non-refinery port locations shall be the import parity price as the nearest refinery port plus coastal/pipeline freight from nearest refinery port, being recovered in the price of such non-refinery prot. 5.7 Notwithstanding anything contained in this Agreement , computation of basic price, duties and taxes and payment thereof for SKO (PDS) shall be in line with the 'Subsidy Scheme' of the GOI as applicable from time to time. On an overall basis, taking into account the receipts and deliveries of t....