Valuation – sale to Holding company and to other persons

PJ/Case Laws/2012-13/1020

Case: M/s BHARAT PETROLEUM CORPORATION LIMITED Vs ASSISTANT COMMISSIONER OF CENTRAL EXCISE, KOCHI

Citation: 2011-TIOL-1143-CESTAT-BANG

Issue:- Valuation – sale to Holding company and to other persons – held, prima facie Rule 9 and 10 of Central Excise Valuation Rules, 2000 not applicable – stay granted.

Brief Facts:- Appellant cleared goods from their premises to their their Holding Company - M/s. Bharat Petroleum Corporation Ltd. (M/s. BPCL), one of the Oil Marketing Companies (OMC).The Adjudicating Authority confirmed the demand against appellant on the ground that they had under-valued the products cleared by them through M/s. BPCL, a Holding Company during the relevant period. In appeal, the Commissioner (Appeals) has sustained the findings of the Adjudicating Authority.

Hence, appellant has filed appeal before the Tribunal.

Appellant’s Contention:- Appellant submitted that the the value which is charged by them to BPCL is the same, which is charged by them to other Oil Marketing Companies, which was in furtherance of an Agreement reached by all the four oil marketing companies for utilizing the facility of refineries and the products coming out there from. Appellant submitted that the provisions of Rule 9 and 10 of Central Excise Valuation Rules, 2000 will not apply in this case as has been settled by the various Benches. Reliance is placed upon the following decisions:

- Ultra Refrigerators Pvt. Ltd. Vs. CCE, Delhi-IV (2004 (t170) ELT 341 (Tri. -Del.)]
- Bharat Petroleum Corporation Ltd. Vs. CCE, Bangalore -I (2007 (218) ELT
585(Tri.-Bang.)]

Respondent’s Contention:- Revenue submitted that once it is admitted as a subsidiary company, the valuation has to be done according to the Valuation Rules.

Reasoning of Judgment:- The Tribunal found that it is not disputed that during the relevant period, the appellant as well as M/s. BPCL were holding subsidiary companies. On perusal of the Rule 9 an 10 of the Central Excise Valuation Rules, the Tribunal found that the said Rules may be applicable only when the entire sales are made to or through the related company, a situation not arising in this case. Prima facie, the judgment of the Ultra Refrigerators Pvt. Ltd. andBPCL will apply in this case. Appellants have made out a prima facie case for waiver of pre-deposit of the amounts involved.

Decision:- Stay Application allowed.

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PJ/Case Laws/2012-13/1020

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