CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL HYDERABAD REGIONAL BENCH - COURT NO. – I Excise Appeal No. 2898 of 2012 (Arising out of Order-in-Appeal No.26/2012 (G) CE dated 19.07.2012 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals), Guntur)

M/s Bhagyanagar Gas Ltd., .. APPELLANT

2^nd Floor, Parishram Bhavan, APIDC Building, Basheerbagh, Hyderabad, Telangana – 500 004.

VERSUS Commissioner of Central Tax .. RESPONDENT Guntur P.B.No. 331, C.R.Building, Kannavari Thota, Guntur, Andhra Pradesh – 522 004.

AND Excise Appeal No. 25057 of 2013 (Arising out of Order-in-Appeal No.46/2012 (G) CE dated 08.10.2012 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals), Guntur)

M/s Bhagyanagar Gas Ltd., .. APPELLANT

2^nd Floor, Parishram Bhavan, APIDC Building, Basheerbagh, Hyderabad, Telangana – 500 004.

VERSUS Commissioner of Central Tax .. RESPONDENT Guntur P.B.No. 331, C.R.Building, Kannavari Thota, Guntur, Andhra Pradesh – 522 004.

APPEARANCE:

Shri Vijay Kumar, Advocate for the Appellant.

Shri V R Pavan Kumar, Authorised Representative for the Respondent.

CORAM: HON’BLE Mr. ANIL CHOUDHARY, MEMBER (JUDICIAL)

HON’BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL)

FINAL ORDER No. A/30072-30073/2026 Date of Hearing:27.11.2025 Date of Decision:06.02.2026 [ORDER PER: A.K. JYOTISHI]

In appeal no. E/2898/2012, M/s Bhagyanagar Gas Ltd., (hereinafter referred to as appellant) have filed appeal against the order of the Commissioner (Appeals) dated 19.07.2012, whereby, demand of Rs. 9,19,985/- along with penalty under Rule 25, as confirmed by the Adjudicating Authority, has been upheld. The period of demand is from January 2010 to December 2010. Similarly, in appeal no. 25057, the appellant has come in appeal against the Order-in-Original dated 08.10.2012, whereby, the demand for the period January 2011 to October 2011 as confirmed by Adjudicating Authority has been upheld by the Commissioner (Appeals), for setting aside penalty under Rule 25.

2. The issues in both these appeals are identical and these orders are relating to periodical demands raised by the Department from time to time.

3. The issue, in brief, is that Department felt that the appellant are not correctly discharging Central Excise duty on the clearance of Compressed Natural Gas (CNG) on stock transfer basis to Retail Outlets and paying the excise duty by back working of the price based on retail outlet selling price. The appellant had entered into an agreement with M/s Hindustan Petroleum Corporation Ltd., (HPCL) on 13.09.2005 for utilization of HPCL’s retail outlets at Vijayawada and Hyderabad, subject to certain mutually agreed terms and conditions and had inter alia agreed to pay a commission of Rs. 1200/- PMT to HPCL/dealer for using the said facilities. The Department analysed the agreement between the appellant and HPCL, including the obligations of both the parties and felt that the goods are being sold not at factory gate but at the said retail outlet. Accordingly, relying on the provisions of Rule 7 of Central Excise Valuation Rules 2000 (Rules), the Department felt that the selling price adopted at the CNG dispensing station, installed in HPCL retail outlet, should be the normal transaction value for discharging central excise duty by the appellant. In both the cases, the Adjudicating Authority has held that the commission/trade margin of Rs. 1.20 per kg paid by the appellant to HPCL is liable to be included in the assessable value on the ground that transactions between the appellant and HPCL is not on the basis of principle to principle basis and that the price payable by the ultimate customer is always fixed by the appellant and that the transaction between the appellant and HPCL is in the nature of stock transfer and not sale, rejecting the evidence of payment of VAT at the time of clearance from factory. Further, for arriving at the said conclusion, the nomenclature of the “commission”

used in the agreement was held to be conclusive against th