Custom, Excise & Service Tax Tribunal
Hindustan Antibiotics Ltd vs Commissioner Of Central Excise, Pune I on 15 July, 2015
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
E/86183/14
- Mum
(Arising out Order-in-Original No. 21/CEX/2012 dated 12.07.2012 passed by the Commissioner of Central Excise, Pune I)
For approval and signature:
Honble Shri P.K. Jain, Member (Technical)
Honble Shri S.S.Garg, Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Hindustan Antibiotics Ltd.
Appellant
Vs.
Commissioner of Central Excise, Pune I
Respondent
Appearance:
Shri Suresh Singh, Consultant for the appellant Shri V.K. Agarwal, Addl.Comm. (AR) for the respondent CORAM:
Honble Shri P.K. Jain, Member (Technical) Honble Shri S. S. Garg, Member (Judicial) Date of hearing : 07.07.2015 Date of decision : 15.7.2015 O R D E R No:..
Per: P.K. Jain:
The brief facts of the case are that the appellant is a Government of India undertaking manufacturing certain medicaments. In addition to manufacture, they also undertake trading of certain medicines inasmuch as they get the medicines manufactured on loan licence basis from other manufacturers who pays the excise duty and clear the same and the present appellant thereafter sold the same goods to various government hospitals/ dispensaries etc. In respect of such traded goods, the price is fixed by NPPA under DPCO. The medicaments are sold at the price so fixed. However, appellant is buying the same medicaments from loan licensee at a discount of 26.5% or 12% to the price fixed by NPPA under DPCO. The case of the revenue is that NPPA while arriving at the price takes into account the normal excise duty payable on such medicaments. However, the appellant is getting the goods manufactured sometime from a loan licencee unit located in area where no such excise duty is payable. Hence according to the revenue, in such cases appellant is deemed to have collected excise duty from their customers and hence are liable to deposit the same under the provisions of Section 11D of Central Excise Act, 1944.
2. Ld. counsel for the appellant submits that as far as the present goods are concerned they are not the manufacturer for excise purposes. They only indulge in the trading of the goods. The loan licensee themselves procure the raw material and manufacture the goods. In case of direct supplies to government hospital/dispensaries etc., loan licencee pay the appellant 12% while in case of supplies through them loan licencee give 26.5% discount on the prices fixed by NPPA. Ld. counsel submitted that they have no excise duty liability and therefore, there is no question of their collecting any extra duty from their customers. It was submitted that price is a composite price and they are selling the goods at that composite price. The invoices received by them did not indicate any excise duty. Similarly when they sell the goods they are not indicating the excise duty element, hence there is no question of recovering excise duty. It was submitted that if at all a view is taken that the extra duty is collected then the same has been collected by the actual manufacturer or loan licensee and not by them and hence demand should have been made to the loan licensee manufacturer and not to them. Ld. counsel further submitted that the issue is squarely covered by the Tribunal decision in the case of Hindustan Petroleum Corporation Ltd. reported in 2003 (162) ELT 391 (Tri-Mum). It was also submitted that similar view has been taken by the Tribunal in the case of Indian Oil Corporation Ltd. reported in 2012-TIOL-893-CESTAT-MAD .
3. Ld. Additional Commissioner (AR) reiterates the Order-in-Original and submits that NPPA while fixing the price takes into account the normal excise duty. Thus while arriving at the prices, excise duty element has been taken into account. Appellant are recovering the amount equivalent to the price fixed under NPPA and therefore, they have recovered the excise duty element and they are therefore liable to deposit an amount equal to excise duty collected by them under Section 11D of the Central Excise Act, 1944.
4. We have considered the submissions made by both sides. It is not under dispute that the appellant is only trading in the goods under dispute. They are selling the goods at price fixed by NPPA. Further they are purchasing the same goods from the manufacture at the price fixed by NPPA with a discount of 12% or 26.5%. Prices are composite one and there is no separate indication of excise duty in the invoices either of appellant or loan licencee. We find that this Tribunal in the case of Hindustan Petroleum Corporation Ltd. (supra) has observed as under:-
2. The matter was argued at length by Shri A.M. Setalwad, learned Counsel for the appellants and Shri M.K. Gupta, learned Jt. C.D.R. for the Revenue. After hearing rival submissions and perusal of case records, we find that the short point is whether Section 11D is applicable in the instant case. Section 11D requires that every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. The main ingredients of this Section are that a person should have collected an amount (in excess of the duty assessed) in any manner as representing duty of excise from the buyer of such goods. In the instant case, we find that only a composite price under the administered pricing mechanism has been charged from the buyers under relevant invoices. We do not find any amount has been charged representing the same as duty of excise. Therefore, one of the main ingredient to attract Section 11D is lacking in this case.
3. In view of above, since the depot of the? HPCL has only recovered from the buyer the amount fixed under the administered pricing mechanism without collecting any amount representing the same as duty of excise, we are of the view that Section 11D is not attracted in this case. As such, we set aside the impugned order and allow the appeal.
5. The position in the present case is similar to the case of Hindustan Petroleum Corporation Ltd. In fact in the present case appellant is not the manufacturer of the goods and has not paid any excise duty. They are only trading and working with the profit on the discount extended by the manufacturer on the price fixed by NPPA. We also find strength in the submission of the ld. counsel for the appellant that if at all there has to be any liability to pay any amount under Section 11D it will be with the manufacturer of the goods and not with them in the facts and circumstances of the case.
6. In view of above, the appeal succeeds. The appeal is allowed.
(Pronounced in Court on .) (S. S. Garg) (P.K. Jain) Member (Judicial) Member (Technical) //SR 6