2021 (3) TMI 1029 - HC - Central Excise

Recovery of excess duty collected at the Depot on the revised rates - refinery/depots/installations of the respondents, extended arms of the respondent company - single entity or not - liability to pay to Government on the invoice raised at the depot of the respondent against its buyer which reflected the excise duty collected - HELD THAT - The issue has already been dealt with by the Hon'ble Division Bench of this Court in the case of COMMR. OF C. EX., COIMBATORE VERSUS HINDUSTAN PETROLEUM COPRN. LTD. 2015 (10) TMI 726 - MADRAS HIGH COURT where it was held that in terms of Section 11D of the Act, the demand can only be made from the manufacturer of the goods and if any duty amount is collected in any manner as representing duty of excise. The learned senior standing counsel sought to distinguish the said decision. However, such an attempt has to fail because the impugned order was a common order passed in three cases concerning the Oil Companies, namely, HPCL, IOCL, BPCL -As noted by the Division Bench, the facts were common and the challenge by all the Oil Companies, namely, IOCL, HPCL and BPCL were identical before the Tribunal, and thus fully applicablr to present case. The appeal filed by the revenue is dismissed - the substantial questions of law are answered in favour of the assessee.

Issues:
1. Interpretation of Section 11D of the Central Excise Act, 1944 regarding excess duty collected at the Depot on revised rates.
2. Determining whether the respondent can be demanded for the excess duty collected at the Depot.
3. Establishing if the respondent is liable to pay duty based on the relationship between the refinery/depots/installations of the respondent company.
4. Examining if the invoice raised at the depot against the buyer, reflecting the excise duty collected, is liable to be paid to the Government.

Issue 1: Interpretation of Section 11D of the Central Excise Act, 1944

The appeal raised substantial questions of law regarding the correct application of Section 11D of the Central Excise Act, 1944. The Appellate Authority's decision was challenged concerning the demand for excess duty collected at the Depot on revised rates. The Court referred to a previous judgment involving M/s. Hindustan Petroleum Corporation Ltd. to guide its decision. The learned Senior Standing Counsel attempted to distinguish the previous decision but failed, as the facts were similar, and the appeal filed by the revenue was dismissed in the earlier judgment.

Issue 2: Demand for Excess Duty Collected at the Depot

The Tribunal held that demand under Section 11D can only be made from the manufacturer of the goods if any duty amount is collected representing excise duty. The Tribunal relied on various precedents to support its decision. The issue was further clarified by a Supreme Court judgment involving the Indian Oil Corporation Limited, which resolved the matter in favor of the assessee. Consequently, the Court found no grounds to consider the appeal, as the issue had already been settled by the Supreme Court in favor of the assessee.

Issue 3: Liability of the Respondent to Pay Duty

The Court noted that the facts were common among all Oil Companies involved in the case, namely IOCL, HPCL, and BPCL. As the challenge and circumstances were identical, the Court upheld the impugned order, as it had already been decided in favor of another Oil Company with similar facts. Therefore, the appeal filed by the revenue was dismissed, and the substantial questions of law were answered in favor of the assessee.

In conclusion, the High Court of Madras dismissed the revenue's appeal, upholding the decision in favor of the assessee regarding the interpretation of Section 11D of the Central Excise Act, 1944, the demand for excess duty collected at the Depot, and the liability of the respondent to pay duty. The Court found no grounds to deviate from the previous judgments and ruled in line with the established legal principles and precedents.

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