COMMON ORDER

MOHAMMED SHAFFIQ, J.

These writ petitions are filed Praying for a writ of certiorarified mandamus to quash the order of the first Respondent /Tribunal and direct the third respondent to grant deduction on the freight charges received by the petitioner towards the crude oil supplied to its customer viz., M/s. Madras Refineries Ltd, (hereinafter referred to as "MRL").

2. At the outset, it may be relevant to set out the facts very briefly:

The petitioner is a Government of India undertaking engaged in exploring Crude Oil in the Cauvery Basin in the State of Tamil Nadu. The crude oil pumped out from the oil wells at Nannilam and Narimanam was transported to the oil storage point of the petitioner at Nagapattinam through pipelines. The oil is transported to the storing point of the petitioner at Tondiarpet in Chennai through trucks by road or in railway wagons. Thereafter, in terms of the directions given by the Ministry of Petroleum and Natural Gas, the Crude Oil was pumped through pipelines to the storage tank of MRL to whom the crude oil was sold. It is pertinent to mention here that the petitioner was under an obligation to sell the entire stock of crude oil only to MRL. The quantum of crude oil pumped through pipelines into the storage tank of MRL was acknowledged/ ascertained after removal of Base Sediment and Water (BS & W) and the certificate was issued by MRL only for the quantity so acknowledged/ ascertained. The Central Excise Officers stationed at MRL would certify the quantity delivered to MRL and CESS was payable only on the acknowledged quantity i.e., after removal of Base Sediment and Water (BS & W).

3. In the above background, the question arises as to whether the freight charges for the transport of crude oil from the oil well at Narimanam to the storage tank of MRL, were pre-sale expenses and thus, form part of turnover. Since, in the view of the Revenue, the delivery/sale concluded only when crude oil was pumped to the storage tank of MRL, the orders of assessment were made treating the transportation/freight charges as taxable turnover, liable to tax and the assessing authority also proceeded to levy penalty. The orders of assessment were confirmed by the First Appellate authority and the Tribunal.

4. For better appreciation, it may be relevant to set out the findings of the Tribunal, which are under challenge in these writ petitions, while confirming the rejection of the claim of deduction on freight charges made by the petitioner.

Findings of the Tribunal:

"1. Though the freight charges are charged separately in the invoices raised, such freight are in the nature of partial re-imbursement.

2. The buyers Tvl.MRL were not prepared to take delivery of the oil at the oil wells at Narimanam or at the storing point at Nagapattinam. It is not proved by the appellant that the crude oil was transported at the risk of the buyers and the appellant had no responsibility of any kind as soon as the oil was loaded in the lorry or railway wagons at Nagapattinam.

3. There was no physical delivery or appropriation of the goods at the oil wells at Narimanam or at the storing point at Nagapattinam. 4. Passing of the property of the goods took place at Tvl.MRL, Manali after ascertainment of the quantity of crude oil as per the method adopted in the intake certificate prepared in the presence of the Excise officials.

5. The appellant had chosen to prepare the sale invoices at Madras only after getting intake certificate from Tvl.MRL on weekly basis for the quantity ascertained.

6. The appellant was not aware of the actual quantity, the value of crude oil and the gravity of the crude oil supplied to the buyers, when the despatch started at Nagapattinam. These were arrived at only after the crude oil was pumpted to Tvl.MRL through pipelines from the storing point of the appellant at Tondiarpet.

7. There cannot be delivery Ex-Narimanam since the crude oil was transported to Tondiarpet storing point at the appellant's risk and the Ce