Custom, Excise & Service Tax Tribunal
Appearance vs Shri Hitesh Shah, Commissioner (Ar) on 29 July, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I E/1729/11-MUM Mahanagar Gas Limited CCE MUMBAI II Arising out of oio 01/COMMR/M-II/2011 dated 19.09.2011 passed by CCE Mumbai II E/85622/14-MUM MAHANAGAR GAS LTD. CCE, MUMBAI - V Arising out of oio 251/01/V/2013/Commr/ANS dated 12.12.2013 passed by CCE Mumbai V E/328/09-MUM Mahangar Gas Ltd. CCE MUMBAI - II Arising out of oio 30/Commr/M.II/08 dated 31.12.2008 passed by CCE Mumbai II E/900/10-MUM Mahangar Gas Ltd. CCE MUMBAI - II Arising out of oio 04/COMMR/M-II/2010 dated 19.03.2010 passed by CCE Mumbai II E/981/11-MUM Mahanagar Gas Ltd. CCE, MUMBAI - V Arising out of oio 54/03/V/2011/COMMR/KS dated 23.03.2011 passed by CCE Mumbai V E/1414/11-MUM Mahanagar Gas Ltd. CCE, MUMBAI - V Arising out of oio 163/12/V/2011/COMMR/M-K5 dated 25.07.2011 passed by CCE Mumbai V E/1681/12-MUM MAHANAGAR GAS LTD. CCE, MUMBAI - V Arising out of oio 367-368/02-03/V/2012/COMMR/ANS dated 24.08.2012 passed by CCE Mumbai V E/1950/12-MUM MAHANAGAR GAS LTD. CCE MUMBAI - II Arising out of oio 01/SJB/COMMR/M-II/2012-13 dated 23.10.2012 passed by CCE Mumbai II E/85518/13-MUM MAHANAGAR GAS LTD. CCE, MUMBAI - V Arising out of oio 367-368/02-03/V/2012/COMMR/ANS dated 23.8.2012 passed by CCE Mumbai V E/87910/13-MUM MAHANAGAR GAS LTD. CCE MUMBAI - II Arising out of oio 01/RN/COMMR/M-II/13-14 dated 31.05.2013 passed by CCE Mumbai II E/89868/13-MUM MAHANAGAR GAS LTD. CCE MUMBAI - II Arising out of oio 09/RN/COMMR/M-II/2013-14 dated 23.9.2013 passed by CCE Mumbai II For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) ================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
Appearance:
Shri M.H. Patil, Advocate for appellant Shri Hitesh Shah, Commissioner (AR) for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 29.07.2016 Date of Decision: 24.08.2016 ORDER NO Per: M.V. Ravindran These eleven appeals filed by the Appellants are directed against respective Orders-in-Original passed by Commissioners of Central Excise, Mumbai II & V, as Adjudicating Authorities.
2. Filtering out all unnecessary details, the brief facts of the case are that the Appellants (also referred as MGL) are engaged in the manufacture of Compressed Natural Gas from Natural Gas and distribution thereof and have integrated infrastructure for the same. When the natural gas is compressed at 200 bar pressure, it is known as compressed natural gas (CNG), which is used as a fuel to motor vehicles. Prior to 1.3.2001, compression of natural gas did not amount to manufacture. However, w.e.f. 1.3.2001, through a Note to Chapter 27, compression of natural gas amounts to manufacture. MGL are classifying the CNG under Tariff Item 2711 21 00 and are paying duty thereon, after having obtained centralized registration for each of the outlets where compression of natural gas and supply thereof takes place. MGL installed their own equipments for compression and dispensation of CNG at each of the outlet and electricity charges to operate those equipments is borne by them. MGL purchase natural gas from GAIL and the sale/purchase of natural gas takes place at a location known as City Gate Station situated at Sion. There are two streams of supply of natural gas by MGL, one supply of piped natural gas (PNG) which is used for cooking purpose by domestic, commercial and small industrial consumers and the other being CNG, as a fuel to motor vehicles. There are three types of outlets/filling stations for supplying CNG, which are known as Mother Stations (MS), Online Stations (OS) and Daughter Booster Stations (DBS). The MS are the locations where natural gas is received through underground pipelines and compressed & stored in stationary cascades of cylinders at around 210 bars and supplied as CNG to motor vehicles at 200 bars pressure, through dispensers. Further, CNG at 230 bar pressure is also filled into cascades of cylinders mounted on light commercial vehicles (LCV) at MS and taken to DBS for recompression and supply to motor vehicles at 200 bar pressure. Online Stations are the outlets somewhat similar to MS, wherein also natural gas is compressed and stored in stationary cascades of cylinders at around 210 bars and supplied as CNG to the vehicles at 200 bars pressure. Filling of CNG into cascades of cylinders mounted on LCV does not take place at OS. The DBS are outlets where direct supply of natural gas through pipeline does not take place, but CNG filled in cascades of cylinders mounted on LCV is received and CNG is dispensed from such cascades, through dispensers, after recompressing at 200 bar pressure. The outlets are owned and/or operated by MGL and/or Oil Marketing Companies (OMCs) and/or Private Parties (PPs) on behalf of MGL and/or OMCs.
3. The assessable value on which MGL pay duty for sale of CNG through their own outlets and/or outlets of PPs, through which CNG is being sold for and on behalf of MGL, is same. Since PPs are selling CNG for and on behalf of MGL, certain service charges are given to those PPs. So far as sale of CNG to OMCs is concerned, since OMCs are purchasing and reselling CNG, the Appellants allow certain discount to them from the retail sales price, which is termed as commission/trade margin, etc. in the agreements. For the purpose of payment of duty on the CNG supplied through PPs, MGL considered the service charges paid to PPs also while arriving at the transaction value. However, for the sale of CNG to OMCs, the Appellants raised sales invoices for the value mutually agreed upon in consequence thereof, the trade profit/commission/discount given to OMCs get excluded from retail sales price, if backward calculation is done. In a nutshell, duty was paid on the sales price to OMCs, which is the transaction value.
4. Eleven Show Cause Notices, covering the period June, 2003 to December 2012, were issued alleging that the assessable value considered by the Appellants for sale of CNG directly through their own outlets or through outlets of PPs should be the assessable value for payment of duty for the CNG supplied to OMCs, as against the Appellants payment of duty on the net sales price charged to OMCs. The basis of the SCNs is that all parameters like ownership of equipment, manner of production, product, RSP, etc. remaining the same, assessable value for the purpose of payment of duty should also be same for discharge of duty for sale of CNG to OMCs. The demands have been arrived at by backward calculation from RSP, excluding the element of VAT and central excise duty/cesses only, leading to demand of duty on commission/ trade margin. The Adjudicating Authority passed separate Orders-in-Original upholding the charges in SCNs, confirmed the demands and imposed penalties, against which the Appellants have filed eleven separate appeals.
4. The Counsel appearing on behalf of the Appellants made various submissions inasmuch as that CNG is purchased by OMCs from MGL and the transaction is of sale-purchase and not of providing any service by OMCs to MGL; that various clauses of the agreements evidence that those are not agency agreements, but are for sale and purchase of CNG on principal to principal basis, which gets evidenced on a comparison of the clauses of agreements between MGL & OMCs and those between MGL & PPs; that on sale of CNG to OMCs, MGL raise periodical bills and the payments are made by OMCs within the stipulated period and for any delay in payment, OMCs are required to pay interest which itself proves that the transaction is on principal-to-principal basis; that MGL pay VAT on sale of CNG to OMCs, which also evidence that the transaction is purely of a sale-purchase transaction; that OMCs also pay VAT on resale of CNG purchased by them from MGL; that OMCs are not acting as agents of MGL, nor are they promoting or marketing the CNG business of MGL, as OMCs themselves are purchasers; that turnover each of the OMCs is more than two to five lakhs of crores of rupees, whereas turnover of MGL is about five hundred to one thousand crores of rupees; that, therefore, the OMCs would not have worked as an agent of MGL, as OMCs are not concerned with sale of MGLs products; that MGL may be interested in working as an agent of OMCs; that when CNG is supplied by MGL through PPs, there is no sale between MGL and PPs, as the sale takes place directly between MGL and the ultimate customers/vehicles and PPs act as agents of MGL for which they get certain service charges; that PPs issue cash memos/bills of MGL when they supply CNG to customers/vehicles; that since PPs are acting as agents of MGL, PPs are paying service tax on the consideration received by them, under the head Business Auxiliary Service; in contrast, as far as OMCs are concerned, sale of CNG drawn from stationary cascades takes place between MGL and OMCs at the outlets OMCs and OMCs sell CNG to their customers/vehicle users and issue their own cash memos/bills for the same and MGL do not have any role to play in such transactions; that even MGL wants to sell CNG at the outlets of OMCs directly to the vehicles, they have no legal right to do so; that service charges paid to PPs during different periods was/is Rs.1.20/kg, Rs.1.74/kg, Rs.1.90/kg and Rs.2.45/kg, whereas discount/trade profit given to OMCs was/is Rs.1.20/kg, Rs.1.40/kg, Rs.2.42/kg, Rs.2.62/kg and Rs.2.74/kg; that since OMCs are bulk buyers of CNG from MGL, higher discount/trade profit was/is offered; PPs role is limited to sale of CNG through their outlets for and on behalf of MGL; that payment of services charges to PPs and discounts to OMCs would also prove that what was offered/paid to OMCs is trade discount/profit margin and not commission; that the nomenclature like discount, trade profit, commission, etc. were/are loosely used in agreements, which were entered into much prior to introduction of central excise duty on CNG and, hence, the same has to be decided from the context in which such terms are used; that it is not the letter, but the spirit behind it has to be considered while interpreting the agreements; that discount offered by whatever name is admissible, based on judgments in the case of Perfect Circle Victor Ltd. v/s. UOI 1992 (50) ELT 676 (SC), CCE v/s DCM Textiles 2006 (195) ELT 129 (SC), Apar Industries Ltd. v/s CCE 2009 (92) RLT 968 (T) and Bhopal Sugar Industries Ltd. v/s. Sales Tax Officer (1977) 3 SCC 147; that even if trade discount is offered under the name and style commission, still the same would not cease to be a trade discount, based on Honble Supreme Court judgment in CCE v/s DCM Textiles - 2006 (195) ELT 129 (SC), that discounted/contract sales price by MGL to OMCs has to be considered transaction value under Section 4, based on various judgments like HBL Aircraft Batteries 2004 (167) ELT 482 (SC), CCE v/s India Dye Stuff 2008 (224) ELT 255 (T), Reckitt Benckiser (India) 2006 (205) ELT 422 (T), Ashok Leyland Ltd. 2002 (146) ELT 503 (SC), Grasim Industries Ltd. 2001 (138) ELT 570 (T); that transaction value similar to import parity price between MGL and OMCs has to be accepted because of contractual arrangement between them, based on judgments in the cases of HPCL 2005 (187) ELT 479 (T), duly upheld by Apex Court, reported in 2006 (196) ELT A-72 (SC), IOCL 2008 (87) RLT 263 (T), MRPL 2009 (92) RLT 370 (T), etc.; that even if the sale/purchase transaction between the buyer and seller takes place simultaneously on account of peculiar nature of the goods, such transactions also have to be considered as sale on principal to principal basis, based on judgments in the case of Bayyana Bhimayya 1951 SCR (3) 267, Alwaye Agencies 1974 (34) STC 457 (Ker), duly approved by Supreme Court 1988 SCR (3) 789, etc.; that when sales tax/VAT is paid on sale of goods by both the parties, the question of payment of central excise duty on such discount, termed as commission/trade margin in agreements, does not arise; that first sale is taking place between MGL and OMCs and VAT is paid by MGL on the actual sales price to OMCs, and second sale is taking place between OMCs and their customers and OMCs also again pay VAT on their actual sales price to its customers; that VAT paid by OMCs on their sales price is higher than purchase price, on which MGL pay VAT; that in the case of sales through PPs, VAT is paid by MGL alone and PPs are not paying any VAT thereon, as PPs sell CNG on behalf of MGL, as their agents and PPs raise invoices/cash memo of MGL for sale of CNG from their outlets and the sale proceeds are collected and deposited in the name and account of MGL; that service charges are paid by MGL to PPs on which PPs are paying service tax, which is not the fact in the cases of OMCs, as even MGL wishes to sell CNG at the outlets of OMCs directly to vehicles, they cannot do so, as they do not have not legal right to sell CNG from the out of OMCs; that invoices are raised by MGL on OMCs for the mutually agreed price, which is the transaction value, which conclusively evidences that the transactions between MGL & OMCs are sale/purchase transactions; that OMCs are not rendering of any service; that on the so called commission, the Department demanded and confirmed service tax from OMCs, claiming that OMCs are providing the service of promoting the business of MGL and such activity would fall under Business Auxiliary Service; the Honble Tribunal, vide Final Order No.A/828-830/14/CSTB/C-I dated 4.6.2014, reported in 2014-TIOL-1114-CESTAT-MUM, in the cases of BPCL & HPCL, has held that since BPCL/HPCL themselves are buying the goods from MGL and MGL is charging VAT/sales tax while selling the CNG to BPCL/HPCL and BPCL/HPCL are also paying VAT/sales tax on the entire value, including the so called commission and the transaction between them is sale/purchase transaction and, hence, service tax was not payable; that ratio of the said judgment is squarely applicable to the present cases also, as the very same consideration has been held to be trade discount offered by MGL to BPCL/HPCL; that demand for the period June 2003 to May 2007 (out of total period of June 2003 to March 2008) covered under Appeal No.E/328/09 is barred by limitation, in the absence of any conscious or deliberate suppression, etc.; that for the said reasons, penal provisions are not invocable. The Counsel submitted certain compilations consisting of central excise invoices and commercial invoices from MGL to BPCL, joint tickets of quantity, sales invoices by BPCL to its dealers by establishing linkage with one of the dealers to substantiate that it was sale and purchase transactions between MGL & OMCs and MGL had paid VAT while selling to BPCL on the price charged and BPCL had also paid VAT while selling CNG to its dealers on the MRP (i.e. including the value addition). Similar compilation in respect of HPCL was also relied upon. Certain compilations of case-laws were also submitted in support of various submissions made on behalf of the Appellants.
4. The Learned Authorized Representative for the Department vehemently argued taking recourse to the reasoning of the Orders of Lower Authorities and claimed that the word commission referred to in agreements with OMCs is misconstrued as trade discount by the Appellants and, therefore, there is no true sale between the Appellants and OMCs, as it is only a paper transaction; that it is a colourable device to evade duty; the clauses of agreements would substantiate the modus operandi; that when manufacture and sale of CNG to vehicles takes place simultaneously, there is no sale of CNG between MGL & OMCs; therefore, there cannot be a situation of offering of trade discount to OMCs; that when all parameters like ownership of equipment, manner of production, product, RSP, etc. remaining the same, assessable value for the purpose of payment of duty should have been the same for discharge of duty for sale of CNG to OMCs; that if the terminologies used in the agreements entered in 1998 were defective, they could have very well used correct terminology in the agreements entered into after introduction of duty on CNG; that the sale of CNG by MGL through its own outlets and/or outlets of PPs is comparable to the outlets of OMCs; that dropping of demand of service tax under Business Auxiliary Service by Tribunal in the case of BPCL would not have relevance to the present case, as service tax is not demanded. Ld.AR has also relied upon various clauses of the agreements entered into between MGL and OMCs and claimed that MGL have mis-declared supply of Natural Gas to OMCs as supply of CNG to show that manufacture takes place at MGLs end. Ld.AR has also relied upon various case laws in support his propositions.
5. We have considered the rival submissions and perused the records.
5.1 We find that the common issue involved in the above appeals is whether price charged for sale of CNG to OMCs can be considered as transaction value for the purpose of payment of duty under Section 4(1)(a) of CEA.
5.2 We find that entire period covered in all the appeals is post July, 2000, governed by amended Section 4. The new Section 4 essentially seeks to accept different transaction value, which may be charged by the assessee to different customers, for assessment purposes, so long as those are based purely on commercial consideration, where buyer and the seller are not related and price is the sole consideration for sale at the time and place of delivery. Thus, it enables valuation of goods for excise purpose on the value charged as per normal commercial practices, rather than looking for a notionally determined value which existed prior to amendment of Section 4 in 2000. The Adjudicating Authority has confirmed the demand on the differential value between MGLs sales price from their own outlets and/or the outlets of PPs and the sales price of MGL to OMCs, treating the difference as the charges for the services rendered by OMCs to MGL and the Department also claims that sale is not taking place between the Appellants and OMCs. We have perused the copies of central excise invoices issued by MGL to OMCs on daily basis for dispensing CNG from 6.00 am to 6.00 am showing the quantity supplied, assessable value, duty paid/payable, etc. We also find that there are joint tickets prepared outlet-cum-party-wise showing the sale period starting at 0600 hrs on preceding day and ending at 0600 hrs on the succeeding day and also show the quantity of CNG dispensed with opening reading, closing reading, total reading and total quantity supplied. Such joint-tickets are also signed by both parties, i.e. Appellants and OMCs. Thereafter, the Appellants are raising tax invoices upon OMCs on monthly basis with specific business days within which payment has to be made by OMCs and for any delay in payment, interest is also payable by OMCs. The Appellants have paid VAT/sales tax on their sale of CNG to OMCs, as evidenced from the invoices. Further, sales invoices of OMCs for resale of CNG to ultimate buyers, VAT/sales tax is paid by them on their sales price. In nutshell, the Appellants are paying VAT on its sales price to OMCs and OMCs are also paying VAT on their sales price to their customers. This clearly evidences that the ARs arguments that sale is not taking place between Appellants and OMCs and also it is a paper transaction is incorrect and not supported by any evidence on record. It is noteworthy that this Tribunal in the case of BPCL/HPCL (supra), wherein the service tax demanded on the very same amount received by OMCs from MGL, claiming such amount as commission paid for rendering of services under Business Auxiliary Service for marketing of CNG manufactured by the Appellants, has been set aside holding that the OMCs themselves are buying the goods from MGL and MGL is charging VAT/sales tax while selling the CNG to BPCL/HPCL and BPCL/HPCL are also paying VAT/sales tax on the entire value, including the so called commission and, hence, the transaction between them is sale/purchase transaction and VAT/sales tax has been paid at both ends the same cannot be considered as service contracts.
5.3 We find that the Appellants contention that OMCs, being bulk buyers, have been given higher discount also needs to be accepted in the absence of any allegation/ substantiation of mutuality of interest between Appellants and OMCs, as both are independent entities. We also find that there is a distinct difference in the transactions of the Appellants with PPs, wherein MGL supply CNG through the outlets owned and operated by PPs and CNG is directly supplied by PPs to the ultimate consumers/vehicles users from their outlets for and on behalf of MGL, under the invoices/bills/cash memos of MGL and the price charged in those bills/invoices/cash memos are the retail sales price or maximum recommended price determined by MGL, from time to time. In a true sense, the customers/ vehicle users at the outlets of PPs are buying CNG from MGL, through the PPs. The privity of contract is between MGL and those buyers and those sales are directly recorded in the Books of Account of MGL and not in the Books of PPs, as there is no sale and purchase of CNG by PPs and PPs act only as an agent of MGL on commission basis. The entire sales proceeds are remitted by PPs to MGL on daily basis. The contracts between MGL and PPs are that of principal and agent as the PPs are merely service providers and not buyers of CNG from MGL. Their obligation under the contracts is merely to provide assistance for supply/sale of CNG to the vehicles by MGL. For acting as an agent of MGL, PPs get specified service charges on per kg basis of the CNG sold by them on behalf MGL. Since the PPs are acting as agents of MGL for supply of CNG, PPs consider their activity as Business Auxiliary Service and pay service tax on the commission received from MGL. We find that sale of CNG by the Appellants to OMCs is on principal to principal basis, which is clear from various terms/covenants of the agreements between MGL and OMCs, i.e. retail sales price is the price at which CNG is to be sold to vehicles by the OMC as communicated by MGL to OMCs, from time to time; OMC shall sell CNG at the outlets situated at the site; Retail Price of CNG shall be fixed by MGL and the OMCs shall sell the CNG only at the retail price communicated by MGL to OMCs, from time to time; OMCs shall pay to MGL the retail price as reduced by profit margin/commission/discount; MGL shall, before 5th of every month, send to OMCs an invoice for the quantity of CNG sold by OMCs during the preceding month. Such invoices shall be based on the meter reading on CNG dispensers jointly taken by MGL and OMCs; OMCs shall pay to MGL the invoice value for CNG sold as stated in the invoice within ten days from the date of invoices; it is specifically stated in the agreements between OMCs and MGL that during the term of the agreements OMCs shall not hold out to be as agents of MGL and it is clearly understood that this agreement is on principal to principal basis and MGL shall not be liable for any of the acts of omission/commission of OMCs. We also find from record that when CNG is supplied by MGL through PPs, there is no sale between MGL and PPs, as the sale takes place between MGL and the ultimate customers/vehicle users and the PPs act as agents of MGL; that the PPs were/are issuing cash memos/invoices/bills of MGL, when they supply CNG to customers/vehicle owners; that the PPs are acting as agents of MGL, for which they get specified service charges and the PPs are paying service tax on such amount; that, in contrast, as far as OMCs are concerned, sale of CNG takes place between MGL and OMCs at OMCs outlets and OMCs issue their cash memos/bills/invoices to their customers/vehicle owners and MGL do not have any role to play in such transactions; that commission paid to PPs was Rs.1.20/kg, Rs.1.74/kg, Rs.1.90/kg and Rs.2.45/kg during different periods, whereas discount given to OMCs was Rs.1.20/kg, Rs.1.40/kg, Rs.2.42/kg, Rs.2.62/kg and Rs.2.74/kg during different periods. From the above discussions, we are of the view that the Appellants case is squarely covered under new Section 4(1)(a) of CEA which essentially permit different transaction values, unlike normal sales price existed prior to 1.7.2000, which has also been explained by CBEC, vide its Circular No.354/81/2000-TRU dated 30.06.2000 in Para 5.
5.4 We also find that the agreements between the Appellants and OMCs were entered into in 1998 or 1999, when there was no levy on CNG, which came into effect only from 1.3.2001 and, hence, the Appellants could not have thought that using certain expressions like commission/trade margin, etc. would create hassle at a future date from central excise point of view and also there would not have been any inducement to use any expression in the agreement with an intent to evade payment duty. The nomenclature like commission/profit margin used in the agreements when read with invoices raised by the Appellants upon OMCs, it is clear that it was the sale transaction on principal to principal basis and, hence, as held by Honble Supreme Court in Perfect Circle Victor 1992 (60) ELT 676 (SC) and D.C.M. Textiles 2006 (195) ELT 129 (SC), etc. trade discount allowed by whatever name called is an admissible deduction and the Appellants are not liable to include the same for the purpose of payment of duty. In the present case, the Appellants have charged mutually agreed price, which is transaction value between the Appellants and OMCs in the normal course of their business for sale of CNG and no additional consideration, whatsoever, flows from OMCs to MGL. Further, by virtue of its technical necessity, the supply of CNG could have been done in the manner in which the Appellants have done, as natural gas by the process of compression amounts to manufacture for the purpose of marketing as CNG for use as fuel which has been done at the time of dispensing. Inasmuch as NG is compressed at 210 bars pressure in Mother Stations and Online Stations and got stored in stationary cascades and dispensed by bringing the pressure to 200 bars to vehicles. Likewise, NG is compressed and filled at 230 bars pressure in cascades of cylinders mounted on light motor vehicles and transported to Daughter Booster Stations, wherein the same is dispensed by recompressing to the pressure at 200 bars pressure. Therefore, considering the technical necessity of the product, this was the only methodology which anybody could have adopted. Since the activity of manufacture takes place at each of the compression station the Appellants are having centralized registration for each of the locations, which are the factories of MGL.
5.5 The Ld. ARs arguments that manufacture and sale is taking place simultaneously would not be correct, as CNG is drawn from stationary cascades and dispensed through dispenser. Further, even if the transaction of purchase and sale between the buyer and seller takes place simultaneously on account of peculiar nature of the product, such transaction has to be treated as sale on principal to principal basis based on the Honble Supreme Court judgment in the case of Bayyana Bhimayya, Alwaye Agencies etc. cited supra by the Appellants.
5.6 Since we are of the view that the Appellants have a strong case on merits itself and are allowing the appeals on merits, we are not discussing the alternate propositions like non-applicability of extended period, etc. The penalties imposed on the Appellants are also not sustainable. With the above discussions, we set aside the impugned Orders and allow the appeals with consequential relief, if any, in accordance with law.
(Order pronounced in Court on 24.08.16) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) nsk 1 20 Appeal No. E/1729/11 & 10 Ors