Custom, Excise & Service Tax Tribunal
M/S Hindustan Petroleum Corporation ... vs Cce, St & C, Visakhapatnam-Ii on 25 August, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. E/510/2007 (Arising out of Order-in-Original No. 12/2007 (VR) dt. 30.03.2007 passed by CCE & C, Visakhapatnam-II) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Hindustan Petroleum Corporation Ltd., ..Appellant(s) Vs. CCE, ST & C, Visakhapatnam-II ..Respondent(s)
Appearance Sh. Karan Talwar, Advocate for the Appellant.
Sh. Chandra Bose, Joint Commissioner (AR) for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) Date of Hearing: 25.08.2016 Date of Decision: 25.08.2016 FINAL ORDER No._______________________ [Order per: Madhu Mohan Damodhar] Appellants are a Government of India Undertaking engaged in the business of refining of crude and marketing various petroleum products thereof. They have an installation at Rajamundry, wherein they have a registration as a Private Bonded Warehouse to receive various petroleum products, including SKO, in bond, to store and to clear them on payment of applicable duty.
2. On examination of valuation of SKO (PDS) cleared to other oil companies on payment of duty by HPCL, department took the view that i. HPCL have recovered higher consideration from other Oil Companies towards the sale of SKO (PDS) than the assessable value arrived at based on APM / subsidized price.
ii. Duty was paid on the clearances of SKO (PDS) on the basis of the value declared in the Central Excise Invoices; and iii. Value declared in the Central Excise Invoices was much lower than the value actually recovered from other Oil companies.
3. Hence SCN dated 04.04.2006 was issued interalia proposing recovery of duty Rs. 3,16,84,443/- allegedly short paid on SKO(PDS) cleared during March 2001 to September 2004 along with interest thereof and also imposition of penalties.
4. The adjudicating authority vide order dated 30.03.2007 confirmed the SCN proposals. Hence this appeal.
5. The Ld. Advocate for appellant Mr. Karan Talwar pointed out that this issue had till recently stood covered and settled vide Boards Circular dated 18.09.2000 and 04.09.2004 and also by number of Tribunal decisions as in the case of GAIL Vs CCE, Vadodara [2001(130) ELT 322 (Tri-L.B)], which held that the assessee had no discretion to fix its price as such prices are fixed by the Oil Co-ordination Committee (OCC) depending on end user. Appeal filed by department against this decision was dismissed by the Honble Supreme Court. However, vide a recent Larger Bench Tribunal decision in the case of ONGC Vs CCE, Raigad [2015 TIOL 1960 Cestat-Mum-LB], it was held that appellant has to discharge excise duty on transaction value which is collected on the Oil Marketing Company by issuing commercial invoices. This Larger Bench order has been appealed against and is pending decision of the Honble Supreme Court.
6. On the question of limitation, the Ld. Counsel pointed out that the department was fully aware of the issue under dispute in view of the department Circulars dated 21.06.1996, 30.06.2000 and 18.09.2000 and in view of the fact that they had been filing returns throughout the impugned period . We find merit in this argument. The adjudicating authority has in fact referred to all these three Circulars. This being so, the department cannot then allege suppression of facts and invoke extended period of limitation under proviso to sub section (1) of Section 11A of the Act. Hence SCN issued on 04.04.2006, for the period March 2001 to September 2004, will necessarily be hit by limitation and requires to be set aside, which we hereby do.
7. In the result, appeal is allowed on the ground of limitation with consequential reliefs, if any.
(Operative part of this order was pronounced in court
on conclusion of the hearing)[
(MADHU MOHAN DAMODHAR) (SULEKHA BEEVI C.S.)
MEMBER(TECHNICAL) MEMBER(JUDICIAL)
Jaya.
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