Supreme Court Exempts Oil Marketing Companies from Excise Duty on Inter-Supply of Petroleum Products
- Case Name: Bharat Petroleum Corporation Ltd. vs. Commissioner of Central Excise Nashik C
- Judge(s): Justices Abhay S Oka and Pankaj Mithal
The Supreme Court ruled that inter-supply prices under the Memorandum of Understanding (MOU) among Oil Marketing Companies (OMCs) do not constitute "transaction value" for excise duty purposes under the Central Excise Act, 1944.
The bench emphasized that the MOU aimed to ensure seamless nationwide distribution, not commercial transactions.
Rejecting the excise department's claim for ₹119 crore against BPCL, the Court held that the MOU’s price was not the sole consideration for the sale.
The case relieves BPCL and remands similar cases involving IOCL and HPCL for fresh adjudication.
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