Customs, Excise and Gold Tribunal - Tamil Nadu
Sr. Terminal Manager, I.O.C. Ltd. vs Commissioner Of C. Ex. on 9 February, 2007
ORDER P. Karthikeyan, Member (T)
1. These appeals filed by Oil Marketing Companies, IOCL, Irugur HPCL, Irugur and BPCL, Sankaridurg are against orders demanding excess excise duty collected by them, in terms of Section 11D of the Central Excise Act, 1944. The details are as under.
Sl. No. Appeal Nos. /Appellants Period Involved Amount Demanded Rs.
1. HPCL, Irugur (Appeal No. 2-7-97 to 28-2-99 1,39,86,872/-
E/552/04)
2. IOC, Irugur (Appeal No. 28-9-96 to 3/99 1,47,39,498/-
E/862/04)
3. BPCL, Sankaridurg 9/97 to 2/99 1,20,00,306/-
(Appeal No. E/1123/04
2. The facts are that the depots of the appellants are registered with the Central Excise Department as dealers for sale of High Speed Diesel Oil, Motor Spirit, Superior Kerosene Oil etc. except the out-let of BPCL which is not registered. They are receiving non-duty paid and duty paid products except BPCL which deals with only duty paid products. Whenever the administered price or rate of duty is raised, the same is implemented also in respect of duty paid stocks with the appellants and those in transit to the appellants' depots. The excess amount so realized is not credited to the Government. There were price revision or revision of rate of duty on the products on several occasions in the material period when the appellants had collected excess amount as part of the price or otherwise but not paid to the Government. The department initiated proceedings to recover such amount realized and confirmed the demand under Section 11D of the Act as indicated in the table above.
3. In the appeals, the assessees have argued that to demand an amount from a person under Section 11D, the following conditions have to be satisfied:
(a) The person should be liable to pay duty.
(b) The amount had to be collected by any person on excisable goods.
(c) That person should have collected any amount from the buyer of such excisable goods in any manner as representing the duty of excise.
4. During hearing S/Shri N. Venkatraman, learned Senior Advocate, M.N. Bharati, Adv. and K.S. Venkatagiri, Adv. for the appellants reiterated the arguments contained in the appeals. They also cited the following case law and the Circular of the Board in support of their arguments.
(a) Hindustan Petroleum Corporation Ltd. v. CCE, Aurangabad
(b) Bharat Petroleum Corporation Ltd. v. CCE, Nagpur 2003 (158) E.L.T. 833 (Tri.-Mum)
(c) Bharat Petroleum Corporation Ltd. v. CCE, Raipur
(d) CESTAT, SRB, Bangalore - Final Order No. 1491 & 1492/05 dt. 25-8-05 in Appeal No. E/628 & 629/2002 IOC Ltd. v. CCE, Tirupathi
(e) Bharat Petroleum Corporation Ltd. v. CCE, Meerut
(f) CBEC's Circular No. 6/40/2000-CX. I, dated 7-11-2000
5. The learned JCDR argued that the impugned amount had been collected as representing duty of excise, that the appellants owned refinery and were manufacturers. He submitted that the impugned orders deserved to be sustained.
6. We have carefully considered submissions and gone through the case records. There is no finding in any of the impugned orders that any of the appellants had manufactured the goods in respect of which demand has been raised. HPCL had sold the impugned products under the cover of invoices which had not reflected the excess amount collected as excise duty. As regards IOCL, there is no clear finding on this aspect. BPCL had shown the impugned amounts in their sale invoices as excise duty.
7. Section 11D reads as follows:
(1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, 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.
(2) xxxxxx (3) xxxxxx (4) The amount paid to the credit of the Central Government under Sub-section (1) or Sub-section (3) shall be adjusted against the duty of excise payable by the person on finalization of assessment or any other proceedings for determination of the duty of excise relating to the excisable goods referred to in Sub-section (1).
8. A perusal of the provisions of Section 11D makes it clear that demand under that Section can only be made from the manufacturer of the goods in respect of which such amount was collected. It is also clear from the unambiguous wording of the Section that the amount should have been collected in any manner as representing duty of excise. Ratio of the following case law also support the reading that a dealer who is not the manufacturer of the goods involved is not liable to pay duty under Section 11D:
Bharat Petroleum Corporation Ltd. v. CCE, Meerut . The Board's Circular cited is also to the same effect. As per the following judicial authorities, only such amounts collected as representing duty of excise in any manner can be demanded under Section 11D.
(a) HPCL Ltd. v. CCE, Aurangabad
(b) BPCL Ltd. v. CCE, Raipur
(c) BPCL v. CCE 2003 (158) E.L.T. 833 (Tri.-Mum.)) (Revenue's appeal against the above decision dismissed by Supreme Court as reported in 2004 (172) E.L.T. A-133 (S.C.)
9. In view of our above discussion, we do not find any merit in the impugned orders. Accordingly we set aside the same and allow the appeals.
(Operative portion pronounced in the open Court on 9-2-07)