2026 (5) TMI 2

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....d the appeal by setting aside the penalty, while upholding the demand of duty along with interest. 2. The facts leading to the filing of the Appeal are stated in brief as follows. The appellant-M/s. Mahanagar Gas Ltd., is engaged in the manufacture and supply of CNG (Compressed Natural Gas). The appellant entered into an agreement with Navi Mumbai Municipal Transport (hereinafter referred to as "NMMT") for supply of CNG through dispensing units installed at the depot premises of NMMT. Under the said arrangement, a trade discount of Rs. 0.17 per kg. was extended to NMMT, resulting in a lower sale price as compared to the price charged to other customers for selling CNG through appellant's other outlets. 3. The department formed a view ....

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....re clear from the finding recorded by the learned Commissioner while upholding the duty demand, which is as under:- "8. ........In the instant case, it is the NMMT which is paying all the taxes for maintaining th premises where CNG filling station is set up; it is the NMMT which is incurring expenditure for providing water and other facilities. NMMT is incurring all this expenditure in connection with buying CNG from MGL. The cost of these facilities is nothing but additional consideration to MGL in the guise of facilities. Hence the cost of these facilities has to be added in the price being charged by MGL...." 6. However, from the records placed before us, it emerges that this foundational assumption is factually incorrect. Th....

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....umers such as BEST and TMT, and in those cases also, on identical issue the Tribunal has held that such discounts are admissible and cannot be loaded onto the assessable value in the absence of any additional consideration. 11. Significantly, in the appellant's own case, on identical facts involving supply of CNG to NMMT, this Tribunal in Mahanagar Gas Ltd. vs. CCE, Mumbai-II vide Final Order No. 8622186222/2024 dated 16.10.2024, while allowing the appeal filed by Mahanagar Gas Ltd. has categorically held that where lease rent is being paid separately for use of land and no additional benefit flows from the buyer, the discount cannot be treated as additional consideration. The relevant paragraph of the said decision are as under:- ....

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.... reference, we reproduce below the said citation:- "The Supreme Court Bench comprising Hon'ble Mr. Justice Ranjan Gogoi and Hon'ble Mr. Justice Navin Sinha on 3-11- 2017 after condoning the delay dismissed the Civil Appeal Diary No. 29175 of 2017 with I.A. Nos. 105002-105004 of 2017 filed by Commissioner of Central Excise, Mumbai-II against the CESTAT Final Order Nos. A/89319-89329/2016-WZB/EB, dated 24-8-2016 as reported in 2017 (348) E.L.T. 175 (Tri.- Mumbai) (Mahanagar Gas Ltd. v. Commissioner). While dismissing the appeals, the Supreme Court passed the following order : "1. Delay condoned. 2. We have heard the Learned Counsel for the appellant and perused the relevant material. 3. We find no merit in ....