2016 (2) TMI 1046 - AT - Central Excise

Recovery of Central Excise Duty - Section 11A of the CEA, 1994 read with Section 11D ibid - Held that - though ATF was sold by the appellant to its airline customers at higher price, but the amount of duty actually paid to the Government Exchequer at the time of clearance of ATF from the refinery was only claimed through the cenvatable sales invoices - Since no excess amount, representing Central Excise Duty has been collected by the appellant; the provisions of Section 11D ibid cannot be invoked for recovery of the Central Excise Duty. The burden of prove that the appellant has collected certain amounts, representing duty of excise has not been discharged by the Revenue inasmuch as no iota of evidence was produced for sustaining such claim. Thus, in absence of any credible evidence adduced by the Department, the charges levelled in this case against the appellant for recovery of Central Excise Duty on the ground of mere presumption cannot be sustained. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Recovery of differential Central Excise duty under Section 11A of the Central Excise Act, 1994 read with Section 11D ibid for selling ATF at higher prices.

Analysis:
The case involved the appellant engaged in procuring, warehousing, and clearing duty paid petroleum products, including Aviation Turbine Fuel (ATF). The Oil Co-ordination Committee (OCC) fixed prices of petroleum products under the Administered Price Mechanism (APM) and revised the price of ATF from time to time. The appellant sold ATF at higher prices than the refinery's price during September 2004 to November 2008. Central Excise officers observed that the appellant collected excess amounts as Central Excise duty but did not remit it to the Central Government. Show cause proceedings were initiated, resulting in a demand for Central Excise duty, interest, and a penalty. The appellant appealed against the order.

The appellant argued that they charged sales prices prevalent on the sale day in the invoices to airline customers and only claimed the actual duty paid on the pre-revised price during procurement. They contended that no excess amount over the Central Excise duty paid initially was collected from customers, making the demand unsustainable. The Revenue, on the other hand, supported the findings in the impugned order, stating that the appellant failed to provide documentary evidence to prove they did not collect excess Central Excise duty from customers.

The Tribunal examined Section 11D of the Central Excise Act, which mandates paying any amount collected in excess of the assessed duty to the Central Government. The appellant demonstrated through sample invoices that they only claimed the duty paid on the pre-revised price from customers. The Tribunal noted that no excess Central Excise duty was collected by the appellant, making the Section 11D provisions inapplicable. The Revenue failed to provide evidence that the amounts collected represented excise duty, leading to the charges being based on mere presumption without credible evidence.

Consequently, the Tribunal found no merit in the impugned order, setting it aside, and allowed the appeal in favor of the appellant. The charges for recovering Central Excise Duty based on presumption without substantial evidence were deemed unsustainable.