2015 (5) TMI 336 - AT - Central Excise

Duty demand u/s 11D - sale of petroleum products - Revenue is of the view that as the price at which goods are sold from the depot are higher than the goods cleared from the refineries and goods are duty paid. Therefore, excess duty collected by the appellant at depots is required to be paid to the department under Central Excise Act, 1944 Held that - As held by larger bench of this Tribunal in the case of Hindustan Petroleum Corporation Ltd. (2012 (6) TMI 246 - CESTAT, MUMBAI), duty is payable by manufacturer or producer of the goods and being appellant before is not a manufacturer or producer of the goods, therefore not liable to pay duty under section 11(D) of the Act. Same has been affirmed by the Hon ble High Court of Madhya Pradesh in appellant s own case. In these circumstances, we hold that appellant is not required to pay duty under section 11(D) of the Act. - Decided in faovour of assessee.

Summary

Issues involved:
Whether the appellants are required to pay duty in accordance with Section 11(D) of the Central Excise Act, 1944.

Analysis:
The case involved a dispute regarding the duty payment by depots of an oil corporation for receiving duty-paid petroleum products from refineries and selling them at prices fixed by the Government of India. The revenue contended that the excess duty collected by the depots needed to be paid to the department under the Central Excise Act, 1944. A show cause notice was issued to six assesses, including various depots of the oil corporation. The issue was adjudicated, and the demand under Section 11(D) of the Act was confirmed, leading the appellants to appeal the decision.

The appellant's counsel argued that since the appellants were not the manufacturers or producers of the goods, duty should be payable by the actual manufacturer or producer, as per Section 3 of the Central Excise Act, 1944. The counsel relied on a decision of the Larger Bench of the Tribunal and a previous case to support this argument. On the other hand, the Revenue argued that the duty was demanded from the oil corporation itself, making them liable under Section 11(D) of the Act.

After hearing both parties and examining the show cause notice, the Tribunal found that the duty was demanded from the depots of the oil corporation, not the refineries. Referring to the precedent set by the Larger Bench of the Tribunal and the High Court of Madhya Pradesh, the Tribunal concluded that duty is payable by the manufacturer or producer of the goods. Since the appellants were not the manufacturers or producers, they were not liable to pay duty under Section 11(D) of the Act. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

In summary, the judgment clarified the liability for duty payment under the Central Excise Act, emphasizing that duty is to be paid by the manufacturer or producer of the goods. The Tribunal's decision was based on legal precedents and the specific circumstances of the case, ultimately ruling in favor of the appellants and setting aside the demand for duty payment.