TaxTMI 
TaxTMI 
2026 (2) TMI 833
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....ordination Committee (OCC). For levy of Central Excise duty, ex-storage sale prices fixed by OCC were considered uniformly. 2.3 With effect from 01.04.2002, APM was dismantled and Oil Marketing Companies (OMCs) namely IOCL, HPCL and BPCL entered into a Memorandum of Understanding (MOU) dated 31.03.2002 at the behest of Ministry of Petroleum & Natural Gas for product sharing arrangements. 2.4 Under the MOU, OMCs agreed to sell and purchase petroleum products among themselves at Import Parity Price (IPP) - defined as the landed cost of products at the nearest port plus transportation costs from the port to the storage point of selling OMC and terminal charges - to ensure smooth and uninterrupted supply of petroleum products across India. 2.5 In terms of the said agreement the OMCs started buying petroleum products from the refineries located near to their respective marketing establishments at the "Import Parity Price". All such transactions of purchase and sale were on principal-to-principal basis and at arm's length. Apart from the said price of Appellant Company did not receive any additional consideration in monetary terms or otherwise from the OMCs in relation to sale o....
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.... Commissioner rejected appellant's contention that IPP represented the correct transaction value under Section 4(1)(a) of the Central Excise Act, 1944. Instead, it was held that the MOU arrangement showed mutuality of interest between OMCs, making them related parties as they were "so associated that they have interest, directly or indirectly, in the business of each other" under section 4(3)(b)(iv) of the Act. - The Commissioner held that since price was not the sole consideration for sale, the assessable value should be determined under section 4(1)(b) read with Rule 11 of the Valuation Rules, 2000. He then applied the principles of Rule 4 of the Central Excise Valuation Rules, 2000, holding that the value of goods sold by the assessee to their own dealers for delivery at any time nearest to the time of removal should be adopted as the assessable value for clearances to OMCs. - In case of price available at the depots, the Commissioner noted that principles of Rule 7 could be applied. Further, since the OMCs were so associated with each other having interest directly in the business of others, the Commissioner held that valuation could be done by adopting provis....
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....n Hindustan Petroleum Corporation Ltd. (supra). Accordingly, the following order was passed: "40. Hence, we pass the following order: (i) Civil Appeal No.5642 of 2009 is hereby allowed. The impugned orders, including the order dated 8th December 2007 passed by the Commissioner of Central Excise, Nashik are hereby set aside: (ii) In the remaining appeals, the impugned judgements are hereby quashed and set aside, and the appeals are remanded to the concerned Tribunals to decide the same in accordance with the law laid down in this judgement and accordingly, the appeals are partly allowed; (iii) ......... (iv) There will be no orders as to the costs." 2.13 The present proceeding is pursuant to the remand direction passed by the Hon'ble Apex Court. 3. The Ld. Counsel for the appellant submits that the period involved in this matter is 01.04.2002 to 30.09.2004, whereas the show cause notice was issued on 30.03.2007, therefore, the impugned demand is barred by limitation as the Hon'ble Apex Court itself held in its judgement dated 30.01.2025 that the extended period of limitation is not invocable. It is further submitted that the issue r....
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....elating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder a Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty or excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of this act or of the rules made thereunder with an intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect as if, for the words "one year", the words "five years" were substituted : Explanation : Where the service of the notice is stayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be." (emphasis ....
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....d is withholding or suppressing the MOU. We are dealing with a public sector undertaking. It is pertinent to note that the impugned judgment incorporates the letter dated 14th February, 2007 issued by the Board. The letter itself records that to ensure a regular supply of petroleum products, the Oil PUSs (OMCs) entered into an MOU at the behest of the Petroleum and Natural Gas Ministry. It also refers to the decision of the Tribunal in the case of Hindustan Petroleum Corporation Ltd.1 by stating that the said decision records that the sale price, as per the MOU, correctly represents the transaction value. Therefore, the department was aware of the MOU even before the date on which the show cause notice was issued. As noted earlier, the date of the MOU is 31st March 2002. Moreover, as indicated in the said letter, MOU was referred to in the decision of the Tribunal in the case of Hindustan Petroleum Corporation Ltd.1. It is pertinent to note that the date of the said decision is 28th February, 2005. In fact, in the said decision, a submission of the revenue has been recorded that the agreement between the oil companies indicates that the price of petroleum agreed thereunder is not a....