Custom, Excise & Service Tax Tribunal
Indian Oil Corporation Ltd vs C.C.E.&S.T., Allahabad on 12 February, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing: 24.08.2015
Date of Pronouncement : 12.02.2016
For Approval & Signature :
Honble Mr. S.K. Mohanty, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No. E/922/2009-EX[SM]
[Arising out of Order-in-Original No.(2/2008)07 of 2009, dated 12.01.2009 passed by the C.C.E.&S.T., Allahabad]
Indian Oil Corporation Ltd. Appellant
Vs.
C.C.E.&S.T., Allahabad Respondent
Appearance Mr. LP Asthana, Advocate - For Appellant Mr. RK Gupta, DR - For Respondent CORAM: Honble Mr. S.K. Mohanty, Member (Judicial) Final Order No.50223/2016, dated 12.02.2016 Per Mr. S.K. Mohanty :
This appeal is directed against the impugned order dated 12.01.2009 passed by CCEST, Allahabad confirming demand of education cess amounting to Rs.45,68,650/- and imposing equal amount of penalty.
2. The brief facts of the case are that during the disputed period, the appellant was a bonded warehouse and was receiving non-duty paid petroleum products from its Barauni Refinery. By Sections 91, 92 and 93 of the Finance Act, 2004, the education cess was imposed at the rate of 2% of the central excise duty with effect from 09.04.2004. During the course of verification of books of accounts in the registered premises of the appellant, Central Excise audit team observed that the appellant had not paid education cess to the tune of Rs.45,68,650/- on clearance of its petroleum products effected during the period 09.07.2004 to 31.07.2004. Thus, the audit report prepared by the Department concluded that the goods cleared during the above period from Barauni warehouse of the appellant had been manufactured after 09.04.2004 and therefore CBEC letter No. F.No.345/2/04-TRU, dated 10.08.2004 would not apply for non-levy of education cess. On the basis of the said audit objection, the show cause proceedings were initiated against the appellant, which culminated into the impugned order dated 12.01.2009, confirming the demand of education cess of Rs.45,68,650/- and imposing equal amount of penalty. Hence the present appeal before this Tribunal.
3. Shri LP Asthana, ld. advocate for the appellant submitted that the goods were produced prior to the date of levy of education cess and that the documents/records maintained by the appellant were produced during the course of adjudication. He further submitted that since the documents recorded were not produced before the audit wing, the same were not accepted by adjudicating authority, i.e., the Commissioner and the duty demand was confirmed holding that the goods were manufactured prior to introduction of levy of education cess on 09.07.2004.
4. On the other hand, Shri RK Gupta, ld. Departmental Representative for the respondent reiterated the findings recorded in the impugned order.
5. Heard the ld. counsels and perused the records.
6. I find from the available records that the appellant in the reply to the Show Cause Notice has categorically stated that the disputed goods cleared during the period from 09.07.2004 to 31.07.2004 were out of stock manufactured in the refinery prior to 09.07.2004. In the said reply, the appellant had also enclosed the relevant records to demonstrate that the goods were manufactured prior to the introduction of levy of education cess. Relevant paragraphs in the reply dated 04.06.2008 to the Show Cause Notice are extracted herein below:-
3. AND WHEREAS when the Audit party asked for the non-payment of Education Cess, on the clearances of petroleum products during the period from 9.7.2004 to 31.07.2004 they replied that the Ed. Cess is a new levy and not leviable on excisable goods manufactured. Further the party vide their letter MGS/IOC/EXCISE/AUDIT(4)-1 dated 16.08.06 with reference to F.A.R. No.48/VNS/04-05 and DAR No.21/ALLd/VNS/Gr 8/2004-05, replied that they are searching the stock record to determine that supplies released from 9.7.2004 to 31.07.2004 was of pre budget or after budget. After preparing the statement, they will revert back on the subject soon.
4. AND WHEREAS the party failed to substantiate their averment, even after the lapse of considerable time, appears tantamount to effecting clearances of petroleum products without determining the actual duty and payments thereof. Further the submission of the party that the goods did not attract levy of Ed. Cess appears baseless and tantamount to mis-statement of facts with an intent to evade payment of Central Excise Duty.
5. AND WHEREAS the party chose to ignore the act that they levy and collection of the Education Cess at appropriate rate was provided for by the clause 81 read with clauses 83 and 84 of the Finance (No.2) Bill, 2004 (22 of 2004) with immediate effect, i.e., with effect from 9.07.2004, owing to a declaration to this effect under the Provisional Collection of Taxes Act, 1931.
7. Ignoring the submissions of the appellant and the documents produced during the adjudication proceedings, the CCE, has confirmed the demand solely on the ground that the said documents were not produced before the audit wing. Since, the appellant had maintained adequate records to show that the goods removed during 09.07.2004 to 31.07.2004 are out of stock of goods manufactured prior to 09.04.2004, I am of the view that action on the part of the adjudicating authority in rejecting the statutory documents maintained by the appellant, who is a public sector undertaking under the Ministry of Petroleum is not legal and proper. In view of the above and in view of the fact that the appellant had maintained the proper records to demonstrate that the goods in question were manufactured prior to 09.07.2004, I am of the opinion that the confirmation of demand on Education Cess along with interest and imposition of penalty on the appellant is not legally sustainable. Therefore, I do not find any merits in the impugned order, and thus, the same is set aside and the appeal is allowed in favour of the appellant.
[Pronounced in the Open Court on ____________ ] (S.K. Mohanty) Member (Judicial) SSK -2-