2019 (9) TMI 746
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....pressed natural gas (CNG) falling under chapter 27 of Central Excise Tariff Act, 1985. By an agreement dated 21/12/2006 with BEST the appellant agreed to supply CNG inside their depots and BEST in turn agreed to provide all facilities and necessary infrastructure for supply of CNG by the respondent. The respondent has also agreed to pass a trade discount of 0.60 Per KG from the price for actual quantity of CNG filled in BEST vehicles. Under the said agreement there was also a clause where under both parties agreed that the respondent could sell the CNG to outsiders. Subsequently, by an agreement dated 12th May 2008 the respondent was allowed to sell CNG to outside customers however, the respondent was required to pay a fixed monthly fee of ....
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.... subsequent agreement dt.12.05.2008 paid a fixed fee of Rs. 35,000/-and a variable fee of rupees 0.60 per kg to BEST. It is his contention that if the respondent would have purchased/taken on lease any premises for supply of CNG to BEST, definitely they would have also incurred expenditure for the aforesaid service, as recovered by BEST for outside vehicles. It is a submission that such an arrangement is nothing but a clear case of undervaluation of CNG sold by respondent to BEST. Thus the discount allowed by respondent to BEST being in lieu of the facilities is nothing but additional consideration hence to be added to the assessable value of CNG sold. In support he has referred to the judgement of Hon'ble Supreme Court in the case of CCE, ....
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....certain premises of BEST was taken on lease basis by the respondents for setting up CNG filling stations for supply of CNG vehicles other than that of BEST. 5. It is contention of the Ld. Advocate is that the aforesaid agreements were for effecting two different and independent commercial transactions and have no connection with each other in as much as trade discount offered to BEST is only because of purchase by them and does not have any nexus to the fixed and variable charges paid by the respondents for premises of BEST taken on lease for supply of CNG to outside vehicles, hence, the revenue's allegation that granting of trade discount is an additional consideration for providing premises by BEST to the Respondent is incorrect. During....
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....he value as an additional consideration for the CNG sold. It is not in dispute that by an agreement dated 21.12.2006 with BEST, the respondent agreed to sale/supply CNG at various bus depots of BEST and it is also agreed that necessary infrastructure was to be provided by BEST. Also, there was a clause in the said agreement which enabled the respondent to sale CNG to outside vehicles on the terms and conditions to be mutually agreed between the parties. Pursuant to the said clause, the respondent entered into a separate agreement with BEST on 12th May 2008. Under the later agreement, the respondent was allowed to sale CNG to outside vehicles from the premises of BEST, however, on payment of a fixed fee of Rs. 35,000/- and variable fees of R....
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....e impugned order, at para 39, observed that - 'the cumulative reading of the above facts, showed that the short charging of Rs. 0.70 per kg from the MRP or retail sale price of the CNG by the appellants to BEST was not a case of legitimate trade discount and that additional consideration, agreed, inter se, under the agreement dated 21.12.2006, flowed to them', and then at para 42, further held that - 'Thus, came to the fore, the agreement dated 21.12.2006, whereby the true nature of the alleged stated discount of Rs. 0.70 per kg in these sales to the BEST was found to be actually a case of corresponding the back of the additional consideration, at least equivalent to the said amounts, in the form of the facilities extended under the agreeme....