Customs, Excise and Gold Tribunal - Mumbai
Indian Oil Corporation Ltd. vs Commissioner Of Central Excise on 11 January, 2005
Equivalent citations: 2005(186)ELT597(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1.1 Appellant is engaged in the manufacture of lubricating oil, inter alia, petroleum products. They removed, on stock transfer basis, part of the production to various depots as a policy. They were adding Rs 1.60 per litre to the assessable value towards transportation charges and depot expenses at the time of clearances/removal of the finished goods to various depots/locations all over India and pay duty on such additions to the value. They filed requisite declarations. They also have a duty paid godown about one kilometres away from their place of manufacture which is known as Lube Complex. The goods are also cleared on payment of duty to this Lube Complex from there they cleared them to various customers/locations. Uniform price is being charged from all customers in the area limits specified as Luke Plant pricing area. They also paid differential duty, on Rs 1.60 per litre, when the products are removed from this Lube Complex (duty paid godown). Notices dated 4.9.97, 3.1 1.97, 19.1 1.97, 23.2.98, 4.8.98 and 3.11.98 were issued demanding duty aggregating to Rs 2,92,57,767/- to be recovered based on allegation that the assessees were not adding the elements of transportation charges and depot expenses to their assessable value but were clearing the goods on values at which the goods were sold to their customers from the factory gate. It was also alleged that transportation of goods from the factory to the depot at Lube complex would not constitute sale. The sale actually taking place at a latter date when the goods were sold from the Lube complex to other customers. Therefore, it was claimed that the assessee was not clearing the goods on considering the correct assessable value and also they have not filed price lists declarations for the goods transferred to Lube Complex.
1.2 The Show Cause Notices were decided by the Assistant Commissioner vide order dated 11.1.1999, who confirmed, in his findings, that depot is a place of removal and hence Rs 1.60 per litre towards transport charges and depot expenses was chargeable to Central Excise duty. This order was taken in appeal. The Commissioner (Appeals) vide his order dated 19.3.1999 ordered the assessees to deposit the entire amount of duty confirmed and the order was complied with on 30.3.1999. The Commissioner (Appeals) vide order dated 6.5.1999 remitted the matter back for passing an order after observing principles of natural justice.
1.3 The Deputy Commissioner of Central Excise, vide order dated 27.9.1999 again confirmed the demand and sustained the charges in the Show Cause Notice. On appeal against this Order 27.9.1999, the Commissioner (Appeals) by his order dated 19.5.2000 allowed the appeal subject to the verification that Rs 1.60 per litre should be added to the assessable value and wherever the said amount was not added in the assessable value, duty on that amount was required to be recovered.
2.1 In view of the above position, the appellants filed an application for refund on 4.9.2000 claiming refund of Excise duty of Rs 29257767/- deposited by T.R. 6 Challan in pursuance of order dated 19.5.1999. The Deputy Commissioner vide his order dated 28.6.2001 rejected the claim on the grounds : (i) that no documentary evidence proving that they have paid differential duty. (ii) it was not clear as to whether the appellants have paid differential duty for Lube Plant or any other plant. (iii) appellant has not made any remarks in the RT-12 returns for the period 2/1997 to 8/1997 for payment of differential duty of Rs 0.24 per litre on the differential value of Rs 1.60 per litre towards the transportation charges to be added to value of clearances to Lube Complex depot. (iv) that the assessee has not paid duty on Rs 1.60 per Hire at the time of clearances. Therefore, the demands issued had been confirmed and (v) appellants having not produced any documentary evidence of their payment of differential duty of Rs 28,19,590/- for the months of September 1988 and October 1988 as duty liability was not prevailing during the said period. Due application of uniform assessable value inclusive of depot expenses and therefore claim for refund for these months was not admissible. (vi) He also found confusion/incoherence about payment of differential duly of Rs 0.24 per litre on the transportation charges of Rs 1.60 per litre cleared by the appellants depot at Lube Complex, as there is no legal and proper intimation given by the assessee. Against the said order, an appeal was filed before the Commissioner (Appeals), who vide his order dated 15.1.2002 upheld the order of the Deputy Commissioner on the sole ground that the appellant had not produced relevant records and substantiate their claim that they have paid differential duty of Rs 1.60 per litre twice for which they were entitled to refund. Hence the present appeal.
3. After hearing both sides, and considering the material on records, it is found that:
(a) on a perusal of application for refund dated 1.9.2000 for Rs 2,92,57,767/- it is found that the same indicated that the application was for refund of pre deposit of Rs 2,95,75,767/- as payments made under protest. There is no case or cause for considering recourse of Section 11B of the Central Excise Act, 1914 in the case of return of pre deposit amounts. In fact, instructions have been issued in the recent past that pie deposit amounts should be returned without insisting of any pre condition of a formal refund application on part of of the persons who had made the pre deposits pursuant an order under Section 351" of the Central Excise, 1944.
(b) In this view of the matter, since the amount in question is to be returned, being a pre deposit amount effected consequent to which Commissioner (Appeals) order dated 19.3.1999 and those proceedings have terminated in the matter being remanded back vide Commissioner (Appeals) order dated 6.5.1999, there was no reason for the department to withhold this amount deposited by the assessee pursuant to an order under Section 35F of the Central Excise Act, 1944.
(c) We find that the Assistant Commissioner's order and the Commissioner (Appeals) order now impugned before us have not considered this aspect of the amount to be pre deposited consequent to Section 35F order and they have gone on different reason to reject by considering refund application to be under Section 11B of the Act, we cannot uphold those orders, since the issue is not of refund of amounts paid as duty but is of amounts paid as pre deposit.
(d) The issue is finally settled by the Commissioner (Appeals) order dated 19.5.2000 and the department was required to issue demands, if any, pursuant to that order and not required to sit in judgement over pre deposit payments made. It is not even brought out by Revenue whether any such demands were required issued pursuant to order dated 19.5.2000. That issue, in any case, is not before us. Compliance of Commissioner (Appeals) order dated 19.5.2000, is a separate issue and cannot be allowed to be bar or and/ cause to mix up the issue of return of pre deposit amounts. We therefore find no reason to withhold the return of the pre-deposit amount.
4. In view of this, we are not determining the other issues which were contested and contended before us as regards the consequence of the order dated 19.5.2000 of the Commissioner (Appeals), since the Commissioner (Appeals) order dated 19.5.2000 and its compliance if required in terms and or refund is not an issue before us. We are restricting our orders only to the issue of the claim as made and return of pre deposit amount paid. We do not find any reason to withhold the return of the aforesaid amount.
5. In view of our findings, this appeal is to be allowed with direction that such amount should be returned without any further delay.
6. The Revenue is however free to pursue enforcement of Commissioner (Appeals) subsequent order separately as per law. Appeal disposed of accordingly.
1.0 (Pronounced in Court)