Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
New Delhi dated the 3rd February, 2010
Circular No. 913/03/2010 -CX
To,
Director General (All)
Chief Commissioners of Central Excise including LTU (All)
Commissioners of Central Excise (All)
Sir/Madam
Sub.:- Valuation of MS and HSD sold amongst OMCs – MOU – Withdrawal of
instructions dated 14-2-2007- regarding.
Attention of field formations is invited to the Board’s instructions issued from
F No. 6/21/2003-CX.I (Pt) on 14 -2 -2007, a copy of which is available on the
departmental web-site cbec.gov.in. The issue discussed in the said instructions
is regarding valuation of petroleum products sold by one oil company to other
oil company based on import parity price as per MOU entered between them.
- In the aforesaid instructions field formations were directed to decide the
cases pertaining to SCNs issued to the Oil companies on the inter company sale
during the relevant period on the basis of the decision of CESTAT, Bangalore in
the case of CCE Vishakhapatnam vs HPCL [2005(187) ELT 479 (Tri.Bang.)] as the
SLP filed by the department had been dismissed by the Hon’ble Supreme Court as
reported in 2006(196) ELT A 72 (SC).
- Subsequently, in another decision on the same subject in the case of BPCL V/s
Commissioner of Central Excise Nasik, CESTAT vide its order No. A/220/09/EB/C-II
dated 17-6-2009 [2009(242) ELT. 358 T], has held that price as per MOU cannot be
considered as ‘transaction value’ under section 4 and decided the case in favour
of the department. M/s BPCL, have reportedly filed an appeal against this order
of CESTAT before the Supreme Court after obtaining COD clearance.
- In view of the aforesaid developments, it has been decided to withdraw the
Board’s instructions dated 14-2-2007. However, as the appeal of BPCL is pending
before the Supreme Court, field formations are directed to consign all the
pending show cause notices on the issue to the call book pending a final verdict
from the Supreme Court. Further, for the cases within the review/appeal period
necessary action to file appeal may be taken immediately.
- Receipt of this circular may be acknowledged
- Hindi version would follow.
Yours faithfully,
(MADAN MOHAN)
Under Secretary (CX.1)
F. No. 6/21/2003-CX.1 (Pt)