9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (1) TMI 762 - AT - Central ExciseDemand of differential duty - Section 11D of CEA - Sale of imported and indigenous petroleum products Allegation that duty reflected in the invoice in respect of imported products was higher than the CVD actually paid Held that - similar issue decided in the case of INDIAN OIL CORPORATION LTD. Versus COMMR. OF CUS., KANDLA 2008 (4) TMI 93 - CESTAT, AHMEDABAD , where it was held that there is system of adjustment of duty paid by oil pool account. Duty collected was not retained by the appellants but deposited with Central Govt, so allegation of excess collection of duty is not correct - the demand u/s 11D against the Appellant is not sustainable - appeal allowed.
Issues:
1. Appellant aggrieved by Order-in-Original filed appeal challenging demand under Section 11D for differential duty. 2. Appellant procuring indigenous and imported petroleum products, facing demand due to discrepancy in duty mentioned in sale invoice. 3. Appellant not manufacturer or importer, following FIFO principle for stock removal, facing demand for differential duty. 4. Tribunal precedent cited in similar cases, holding no excess collection of duty from customers, allowing appeals and setting aside demands. Issue 1 - Challenge to Demand under Section 11D: The appellant, aggrieved by the Order-in-Original, filed an appeal challenging the demand made under Section 11D to recover the differential duty. The appellant had procured indigenous and imported petroleum products, including Furnace oil, and stored them in tanks at their installation. Due to the pricing mechanism set by the Ministry of Petroleum & Natural Gas, the oil companies had to adopt fixed selling prices regardless of the origin of the products, leading to a discrepancy in the duty paid for imported stocks. The demand was made by comparing the duty mentioned in the sale invoice with the actual Customs duty paid, resulting in the present appeal. Issue 2 - Discrepancy in Duty Mentioned in Sale Invoice: The appellant, not being the manufacturer or importer of the goods involved, faced a demand for differential duty due to discrepancies in the duty mentioned in the sale invoice. The appellant followed the FIFO principle for stock removal, where removals were adjusted towards imported goods first. Despite some oversight in mentioning the duty type in the sale invoice, the appellant could always demonstrate the actual stock accounts with the duty paid. The demand under Section 11D was made to recover the differential duty, which the appellant contested in the appeal. Issue 3 - Application of FIFO Principle and Duty Discrepancy: The appellant's case spanned from March 1994 to April 2000, involving the storage and removal of Imported Motor Spirit and Furnace Oil. The appellant's practice of stocking goods in the same tank irrespective of origin and paying Customs/Excise duties after release, following the FIFO principle, led to the demand under Section 11D. However, the Tribunal's precedent in similar cases, like INDIAN OIL CORPORATION LTD. Vs. CCU, KANDLA 2008, highlighted that there was no excess collection of duty from customers, as the duty recovery was in line with the Administered Price Mechanism Scheme. Issue 4 - Tribunal Precedent and Setting Aside Demands: The Tribunal's order in the case of INDIAN OIL CORPORATION LTD. Vs. CCU, KANDLA 2008, provided a significant precedent for the present case. The Tribunal held that demands similar to the one faced by the appellant were not sustainable, as there was no excess collection of duty from customers. The Tribunal considered the Administered Price Mechanism Scheme, where any excess recovery had to be deposited in the oil pool account, and any deficiency was compensated from the same account. This scheme aligned with the purpose of legislation under Section 28B of the Customs Act, 1962, and Section 11D of the Central Excise Act, 1944. Consequently, the Tribunal allowed the appeal, setting aside the demand and providing consequential reliefs. This detailed analysis of the judgment showcases the issues involved, the appellant's contentions, the legal principles applied, and the Tribunal's decision based on precedent and legislative intent.
|
