BPCL receives adjudication order by Commissioner of Central Tax and Central Excise, Kochi

New Delhi, Feb 23, 2026: State-run oil major PSU, Bharat Petroleum Corporation Ltd (BPCL) has informed the exchanges that the Company has received an Order from the Commissioner of Central Tax and Central Excise, Kochi dated 21st February 2026.

The Adjudicating Authority (AA) has passed the order dated February 21, 2026, and BPCL will file appeal against the order before the Hon’ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The expected financial implication on the company is Rs Rs.1,816.65 Crores [Duty – Rs.476.94 Crores plus applicable Interest up to date- Rs.1,339.70 Crores (approx.) plus penalty Rs.95,000] from the period of September 2004 to May 2010.

There were 19 Show Cause Notices (SCNs) which were pending for adjudication by the central excise department pertaining to transaction value under the Central Excise law. The AA has now adjudicated these SCNs by passing the order dated February 21, 2026.

Confirmation of Demand amounting to Rs 476.94 Crores:

The major demand confirmed pertains to pre-merger period of Kochi Refineries Limited (KRL) i.e. from September 2004 to August 2006 which was pending for adjudication.

The AA ruled that BPCL and KRL were related parties, so Refinery Gate Price cannot be used for excise valuation and department’s valuation under Rule 11 read with Rule 9 of Central Excise Valuation Rules, 2000 is valid. After the merger, BPCL – Kochi Refinery used Rule 7 of Central Excise Valuation Rules, 2000 (highest‑quantity depot price), but the department applied the highest value of the entire fortnight to all clearances under Rule 11 read with Rule 7 of Central Excise Valuation Rules, 2000.

Future reference: BPCL will analyse and file an appeal against the said order to the Hon’ble CESTAT.