2016 (11) TMI 145 - AT - Central Excise

Demand of duty u/s 11D - dealer - allegation that the appellants have collected the enhanced duties on the sale of duty paid stocks of MS/HSD - Held that - The appellants are registered with department as Dealers and they only store the duty paid goods. Further, that appellants have not collected any excess amount representing as excise duty in their invoices when the goods were cleared from their Warangal depot - demand set aside - Decided in favor of the assessee.

Summary

Issues:
1. Applicability of excise duty on sale of duty paid stocks from a depot.
2. Whether the depot is liable to pay duty as a manufacturer.
3. Interpretation of Section 11D of the Central Excise Act, 1944.

Analysis:
1. The case involved M/s. Bharat Petroleum Corporation Limited, a government undertaking engaged in refining and marketing petroleum products, specifically regarding their Depot at Warangal where duty paid petroleum products were stored and distributed. The dispute arose when a Show Cause Notice was issued alleging the collection of excess excise duty on the sale of duty paid stocks from the depot without mentioning the duty amount in the invoices.

2. The appellants argued that the Warangal Depot was not a manufacturer but a dealer registered with the department, storing duty paid goods and not collecting any excess amount representing excise duty in their invoices. They relied on various judgments supporting their position, emphasizing that they were not liable to pay duty as manufacturers. The Tribunal concurred with this argument, citing the judgments in favor of the appellants and setting aside the demands made in the impugned order.

3. The Tribunal scrutinized the provisions of Section 11D of the Central Excise Act, 1944, which deals with recovery of duties not levied or paid or short-levied or short-paid. In this case, the Tribunal found that the demands made by the adjudicating authority were not sustainable based on the interpretation of the law and the precedents cited. Consequently, the appeal was allowed with consequential reliefs granted to the appellants.

In conclusion, the judgment by the Appellate Tribunal CESTAT Hyderabad ruled in favor of M/s. Bharat Petroleum Corporation Limited, holding that the demands for excise duty on the sale of duty paid stocks from the Warangal Depot were not valid. The Tribunal emphasized that the depot was not liable to pay duty as a manufacturer and set aside the duty demands, providing relief to the appellants in this case.