2014 (10) TMI 338 - AT - Central Excise

Demand u/s 11D - subsequent upward price revision and the goods were sold from the depot at a higher price - revenue of the view that Since the price at the depot is a cum duty price, it implies that the appellant collected a higher amount of excise duty from the customers; therefore, the demand is sustainable. - Held that - The liability to discharge duty arises when the goods are cleared from the factory. When the goods cleared and sold through the depot, the law mandates that duty liability has to be discharged on the price prevailing at the depot at the time of clearance of the goods from the factory. There is no dispute in the present case that the appellant has discharged the duty liability in accordance with the law. What happened to the goods subsequently does not influence the assessable value under Section 4 of the Act. This is the view taken by this Tribunal in the case of BPCL case (2002 (5) TMI 107 - CEGAT, COURT NO. III, NEW DELHI) affirmed by the Hon ble Apex Court - Decided against Revenue.

Summary

Issues:
1. Appeal against confirmation of duty demand under Section 11D of the Central Excise Act, 1944.

Analysis:
The judgment involves an appeal by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise & Customs, Nashik Commissionerate. The impugned order set aside the duty demand of Rs. 23,41,089 under Section 11D. The Revenue contended that the appellant, an oil corporation, discharged excise duty liability based on the sale price at their depot, which resulted in a higher price revision post-clearance from the factory. The Revenue argued that the cum duty price at the depot meant the appellant collected excess excise duty. However, the respondent argued that duty liability is determined by the price at the depot at the time of factory clearance, citing Section 4 provisions. The respondent relied on a Tribunal decision, upheld by the Supreme Court, to support their position that subsequent price changes at the depot do not impact excise duty liability.

Upon careful consideration, the Tribunal emphasized that duty liability arises upon goods clearance from the factory, requiring duty payment based on the depot price at that time. As the appellant adhered to this requirement, subsequent price changes at the depot do not affect the assessable value under Section 4. The Tribunal referenced the BPCL case, upheld by the Apex Court, to support this interpretation. Consequently, the Tribunal found no merit in the Revenue's appeal and dismissed it.

The judgment clarifies the legal principle that excise duty liability is determined by the price at the depot at the time of factory clearance, irrespective of subsequent price changes. This interpretation aligns with Section 4 provisions and established case law, emphasizing the importance of correctly discharging duty obligations at the appropriate stage of clearance. The decision underscores the significance of adhering to statutory requirements in excise duty assessments to ensure consistency and compliance with legal standards.