2015 (1) TMI 815 - AT - Central Excise

Duty demand u/s 11D - duty variation due to re-determination of petroleum products - Held that - Section 11D requires that every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. The main ingredients of this Section are that a person should have collected an amount (in excess of the duty assessed) in any manner as representing duty of excise from the buyer of such goods. In the instant case, we find that only a composite price under the administered pricing mechanism has been charged from the buyers under relevant invoices. We do not find any amount has been charged representing the same as duty of excise. Therefore, one of the main ingredient to attract Section 11D is lacking in this case - Following decision of M/s. Hindustan Petroleum Corporation Ltd. vs. CCE, Aurangabad 2003 (6) TMI 149 - CESTAT, MUMBAI - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Section 11D of the Central Excise Act, 1944 regarding the recovery of excess amount collected as duty of excise.
2. Verification of invoices and application of the principle laid down in the case of M/s. Hindustan Petroleum Corporation Ltd. vs. CCE, Aurangabad.

Analysis:

Issue 1: Interpretation of Section 11D
The case involved a dispute regarding the collection of excess amounts under the Administered Pricing Mechanism for petroleum products from 1996 to 2000. The Department demanded the excess amount collected in the form of excise duty under Section 11D of the Central Excise Act, 1944. The appellant, M/s. IOC Ltd., argued that they did not charge any excess amount representing duty of excise from the buyers. The Tribunal referred to a previous case involving M/s. Hindustan Petroleum Corporation Ltd. and noted that Section 11D requires the collection of an amount representing duty of excise from the buyers. As the invoices were not available for verification, the Tribunal set aside the impugned orders and allowed the appeals by way of remand, directing the original authority to verify the invoices and decide the matter afresh based on the principle established in the cited case.

Issue 2: Verification of Invoices and Application of Precedent
Both parties agreed that the related invoices needed to be verified to determine if any amount had been collected as duty in excess of the amount paid. The Tribunal observed that the invoices were not on record and referred to the decision in the case of M/s. Hindustan Petroleum Corporation Ltd. where it was held that the main ingredient to attract Section 11D is the collection of an amount representing duty of excise from the buyers. Following the precedent, the Tribunal allowed the appeals by remanding the case to the original authority for a fresh decision after verifying the invoices and providing M/s. IOC with an opportunity for a fair hearing. The cross-objection filed by the Department was also disposed of in light of the remand decision.

In conclusion, the judgment focused on the interpretation of Section 11D of the Central Excise Act, 1944 and the application of a precedent set in a previous case to determine the liability of M/s. IOC Ltd. for the excess amount collected under the Administered Pricing Mechanism. The Tribunal emphasized the importance of verifying invoices and ensuring a fair hearing for the appellant before reaching a final decision on the matter.