2011 (9) TMI 434 - SC - Central Excise

Collection of Excise duty from the customers on account of fluctuation in rates of the petroleum products on the stocks lying at various depots - Demand u/s 11D - assessee being only a dealer and not a manufacturer - Held That - No demand can be raised against the appellant under Section 11-D as it is not the manufacturer of the concerned goods.

Summary

Issues:
1. Interpretation of liability to pay Excise duty under Section 11D of the Central Excise Act, 1944.
2. Applicability of retrospective amendment to Section 11D.
3. Dispute regarding the liability of a dealer vs. a manufacturer for Excise duty.
4. Jurisdiction of the Tribunal to decide on Excise duty matters under Section 35-L(b) of the Act.

Analysis:
1. The primary issue in this case was the interpretation of the liability to pay Excise duty under Section 11D of the Central Excise Act, 1944. The Tribunal examined whether the assessee, being a dealer and not a manufacturer, was liable to pay Excise duty. The Tribunal held that the demand against the appellant, for goods not manufactured by them, could not be sustained under Section 11D. The Tribunal referred to a statutory amendment under the Finance Act, 2000, which clarified the scope of the term "every person" in Section 11D as the manufacturer/producer. As the appellant was not the manufacturer of the goods in question, the demand under Section 11D was set aside, and the appeal was allowed.

2. The issue of the retrospective application of the amendment to Section 11D was also addressed. The Tribunal noted that the statutory amendment under the Finance Act, 2000, with retrospective effect from 20th September 1991, clarified the interpretation of Section 11D. However, the Tribunal emphasized that this retrospective amendment did not apply to the period in question, which was from July 1997 to August 2000. Therefore, the Tribunal concluded that the appellant's contentions regarding the liability under Section 11D were valid for the relevant period.

3. The dispute between the revenue and the assessee revolved around the liability of a dealer, who collected Excise duty from customers, to deposit the amount with the excise department. The revenue argued that the clearances made by the assessee were covered under Section 4(3)(c)(iii) of the Act, making them liable to pay the differential duty. However, the assessee contended that the revenue did not raise the issue of Section 4(3)(c)(iii) before the Tribunal. The Tribunal focused on the sole issue of liability under Section 11D and found no infirmity in the impugned order on merits for the period in question, leading to the dismissal of the appeal.

4. Lastly, the jurisdiction of the Tribunal to decide on Excise duty matters under Section 35-L(b) of the Act was discussed. The Tribunal concluded that the present appeal did not involve the determination of any question related to the rate of duty of Excise or the value of goods for assessment. Therefore, the appeal was deemed not maintainable under Section 35-L(b) of the Act, and it was dismissed for lacking merit, with no order as to costs.