2007 (2) TMI 380 - AT - Central Excise

Demand of differential duty - Amount collected in excess - petroleum products - Interpretation of statutes - permitted to store customs duty paid imported goods along with such goods produced indigenously on which duty was not paid in their storage tanks as per Board s Circular F. No. 261/6/5/84-CX - HELD THAT - While clearing goods of both streams the appellants used clearance documents with the same format which showed an amount paid towards CUS.DUTY/CX. DUTY . The appellants explained that this was owing to the common software they had used. In respect of the impugned goods they had passed on a lower amount than the actual incidence of tax on the goods they had borne. We find that the finding of the Commissioner that the impugned goods are excisable goods is totally misconceived and incorrect. From the unambiguous wording of the above sub-section the impugned demand of amounts collected as duty on clearances of imported petroleum products is not sustainable. Thus, the impugned order is not sustainable. Accordingly we set aside the impugned order and allow the appeal.

Summary

Issues:
- Interpretation of Section 11D of the Central Excise Act
- Application of Section 11D to imported goods
- Principles of natural justice violation
- Excess duty collection on imported goods
- Use of common software for invoices

Analysis:

1. The appeal involved a challenge against an Order-in-Original demanding a significant amount from the appellant, a company storing imported and indigenous petroleum products in mixed bonded tanks. The Commissioner found that the goods had lost their identities and had become different excisable goods. The appellant had cleared imported products under Rule 52A invoices, collecting an excess amount from customers, leading to a demand under Section 11D of the Central Excise Act.

2. The Commissioner's decision was based on the belief that the excess amount collected could be recovered as excise duty legally, even if not explicitly labeled as such. The appellant argued that the customs duty paid on imported goods should not be considered excisable goods, citing natural justice violations and discrepancies in the software used for invoices covering both imported and indigenous goods.

3. The appellant contended that Section 11D applied only to excisable goods and not to imported goods. They referenced case law supporting their argument and highlighted previous decisions where similar issues had been addressed, emphasizing that excess amounts collected on imported goods were not subject to Section 11D.

4. The Tribunal analyzed Section 11D and concluded that the Commissioner's finding that the imported goods were excisable goods was incorrect. They cited previous judicial authorities, including decisions involving similar issues, where it was established that excess amounts collected on imported goods were not covered under Section 11D. Therefore, the demand for amounts collected as duty on imported petroleum products was deemed unsustainable.

5. Ultimately, the Tribunal set aside the impugned order, ruling in favor of the appellant. The decision was based on the interpretation of Section 11D and the established legal position that excess amounts collected on imported goods did not fall under the purview of excisable goods as per the Central Excise Act.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by the parties, and the Tribunal's decision based on the interpretation of relevant provisions and precedents in similar cases.