Customs, Excise and Gold Tribunal - Bangalore
Senior Terminal Manager, Indian Oil ... vs Commissioner Of Central Excise on 27 April, 2004
ORDER S.L. Peeran, Member (J)
1. Both these appeals raise a common question of law in facts and hence they are taken up together for disposal as per law.
2. The question that arises for consideration is as to whether SSLF, which is in the nature of rent collected for retail outlet of dealers, is required to be added to the assessable value of the petroleum products, supplied by the appellants, in terms of Section 4 of the CE Act. The appellants relied on the judgment rendered by the Apex Court in the case of CCE Vs. Indian Oxygen Ltd. - 1988 (36) ELT 730(SC) and by the Tribunal in the case of Bharat Petroleum Corporation Ltd Vs. CCE, Cochin - 1999 (108) ELT 402 (Tribunal). However, the Commissioner has distinguished these judgments and has held that the charges collected by the appellants are related to sale of petroleum products and are a component of price as part of the agreement with the dealers and hence they are required to be added to the assessable value. He has distinguished the judgment relied by the assessee.
3. Learned Senior Manager, appearing for the appellants, submits that in the case of BPCL, these judgments were relied before the President's bench on the same matter, and the Bench, by Final Order Nos. 1255 & 1256/2003 dated 1509.2003, has allowed the appeals by following the judgments. They also relied on the decision rendered by the Apex Court in the case of Indian Oxygen Ltd. (supra) wherein also the Apex Court held that rental charge for gas cylinder collected by the assessee is not includible in the assessable value as supply of cylinder is not a manufacturing activity.
4. Learned SDR, after perusal of these judgments, submitted that though the issue is covered, but yet would like to reiterate the grounds taken up by the Department and confirmed by the commissioner in his Order.
5. On a careful consideration, we are of the considered opinion that the Tribunal has already decided the issue in the case of BPCL Vs. CCE as per Final Order Nos. 1255 & 1256/2003 dated 15.09.2003. the findings recorded in para 3 to 5 are re-produced below:
"3. The contention of the appellants is that licence fee is entirely related to lease of outlets and machinery installed therein and has no connection whatsoever with the sale of MS and HSD oil by the appellants to the dealers. They, therefore, contend that licence fee has no relevance to the pricing and assessment of MS and HSD oil. The appellants have relied on the decision of the Tribunal in the case of HPCL Vs. CCE, Hyderabad 2002 (149) ELT 1294 and the decision of the Apex Court in case of Indian Oxygen Vs. CCE 1988 (36) ELT 730 (SC).
4. We have perused the records and considered the submissions made by both sides. It is clear from the facts of the case that leasing out of outlets and sale of MS and HSD oil are separate transactions between the appellants and their buyers of MS and HSD. This is clear from the fact that no licence fee is levied from the dealers who have not leased out the outlets of the appellants. In the circumstances, it has to be held that licence fee, which is for a different transaction and consideration than the sale of MS and HSD cannot form part of the assessable value of MS and HSD. The issue also is settled by the decisions relied on by the appellants.
5. In view of what is stated above, the appeals are allowed with consequential relief, if any, to the appellants."
We note from the above orders that a clear finding has been arrived at that licence fee is not required to be added to the assessable value on the sale of petroleum products. The judgments of the Apex Court and the Tribunal have been applied. We do not see any reason to take a different view, as the judgments are fully applicable to the facts and circumstances of the case. Respectfully following the ratio of these judgments, the impugned orders are set aside and the appeals allowed with consequential relief, if any.