9911796707
TMI Blog2011 (9) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... pped. - E/527/2007 - A/1666/WZB/AHD/2011 M/1946/WZB/AHD/2010 - Dated:- 15-9-2011 - Mrs. Archana Wadhwa, And Shri B.S.V. Murthy, JJ Represented by: Shri M.H. Patil, M/s Aparna H, Advocates, for Appellants Shri R.S. Sanga, SDR for Respondent Per: B S V Murthy: M/s Indian Oil Corporation Ltd. (appellant) was receiving non-duty paid petroleum products from M/s Reliance Petroleum Ltd./M/s Reliance Industries Ltd., Jamnagar (M/s RPL/RIL for short) through under-ground pipelines in their bonded warehouse. On comparison of invoices under which the petroleum products were received and the invoices under which the same were sold, it was found that the appellants were collecting certain sums as "other charges - LTEU of LIET" = 21.6% of the price + sales tax charged by RIL. While the appellant paid 21.6% towards sales tax to RIL, appellant collected additional amount because of adoption of cum sales tax value of the petroleum products received by them to calculate sales tax amount recoverable under heading "other charges ". Consequently, it was found that the appellant was liable to pay Rs.1,94,98,643/- during the period from April 2002 to September 2004. The entire amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en rightly imposed and appellant is liable to pay duty as well as interest. However, we take note of the fact that in the impugned order, the Commissioner has not given option to pay the interest and penalty to the extent of 25% within 30 days of receipt of the order. Therefore, such option is to be extended now in terms of this Tribunal's decision in the case of Swati Chemicals others as reported in 2009 (94) RLT 684 (CESTAT) . Accordingly, if the appellants deposit interest and penalty to the extent of 25% within 30 days of the receipt of this order, the appellants would not be required to pay balance 75% penalty. It is made clear that if either penalty or interest is not paid within 30 days, the appellant shall be liable to pay penalty equal to duty. (Pronounced in Court on) (Archana Wadhwa) Member (J) (B S V Murthy) Member (T) Per: Archana Wadhwa: After going through the order passed by my learned brother, I proceed to record a separate order. As detailed facts of the case already stand narrated in the order proposed by my learned brother, the same are not being repeated here to avoid redundancy. 2. I find that though the appellants had deposited the duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's contention is that they have collected excess amount of Sales Tax from their buyers, whereas they were required to reimburse lower amount of tax to their sellers. Such excess recovery of tax from the buyers cannot form a part of the value of the goods. Learned Advocate had contended that there was no allegation that such excess recovery was on account of the consideration for sale of the goods. Reliance stand placed on various decisions of the Tribunal as detailed below. a) M/s Baroda Electric Meters Ltd. Vs. Collr.of C.E. 1997 (94) ELT 13 (SC) b) M/s Gujarat Guardian Ltd. Vs. CCE Surat 2005 (191) ELT 641 (Tri-Mumbai) c) M/s Britco Food Co. Ltd. Vs. CCE Pune-I 2003 (55) RLT 359 (CEGAT-Mum.) d) M/s Hindustan Petroleum Corpn. Ltd. Vs. CCE Mangalore 2007 (207) ELT 605 (Tri-Bang.) e) CCE Bhubaneswar-I Vs. M/s Idcol Ferro Chrome Alloys Ltd 2007 (217) ELT 373 (Tri-Kolkata) f) M/s Rine Engineering Pvt. Ltd. Vs. CCE Chandigarh 2008 (86) ELT 933 (CESTAT-Del.) g) CCE Mumbai Vs. M/s Cable Corpn. of India 2008 (85) RLT 759 (CESTAT-Mum.) Ratio of the above decisions is that excess recovery of freight or of insurance amount collected from the buyers than the amount actually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 2002 to September 2004, whereas the show cause notice was issued on 5.5.06. The Commissioner has invoked the extended period of limitation by observing that the appellants have suppressed the fact that they were collecting extra amount from their customers and not including the same in the assessable value. I am afraid that such type of bald statement cannot put the appellant under the allegations of suppression/mis-statement with intent to evade payment of duty. Admittedly, such excess charges were being shown on the Central Excise invoices issued by the appellant. In fact, the entire case of the Revenue is based upon the verification of Central Excise record during audit and notice itself is to the effect that verification of the Central Excise invoices revealed excess recovery of Sales Tax. If the excess Sales Tax was being recovered by reflecting the same in Central Excise invoices, I fail to understand as to how the charges of suppression or mis-statement with intent to evade payment of duty, can be alleged against the appellant so as to invoke longer period of limitation. The issue is admittedly capable of two different interpretations and if the appellant have re-calculate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement with intent to evade payment of duty. 6. Whether the extended period is invocable against the appellant as held by learned Member (Technical) or demand has to be held as hit by bar of limitation as observed by Member (Judicial). 7. Whether the interest is required to be confirmed against the appellant as held by learned Member (Technical) or as the demand has been held as barred by limitation, the interest cannot be confirmed as held by Member (Judicial). 8. Whether the penalty has to be imposed on the appellant as observed by learned Member (Technical) with an option to them to pay the same to the extent of 25% within 30 days from the receipt of the order or penalty is required to be set aside in its totality as held by Member (Judicial). 9. Whether the appeal has to be rejected in terms of order proposed by learned Member (Technical) or the same has to be allowed as held by Member (Judicial). (Pronounced on Court on) (B.S.V. Murthy) Member (T) (Archana Wadhwa) Member (J) Opinion of 3rd Member on Difference of Opinion between the Bench in the case of IOCL Vs. CCE Ahmedabad in Appeal No.E/527/2007 Per: M V Ravindran: I have been nominated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Counsel for the appellants submit that from perusal of the Show Cause Notice, it was demanding differential Excise duty allegedly short paid by the above assessee by not discharging duty liability on sales tax collected by them from their purchaser. He would draw my attention to the annexure to the Show Cause Notice and submitted that it is clearly indicated that the demand of differential duty is for excess sales tax collected. It is his submission that the judgment of Hon'ble Supreme Court in the case of Baroda Electric Meter Ltd. 1997 (94) ELT 13 (SC), would be applicable in this case, which has been correctly followed by ld.Member (Judicial). He would draw my attention to the said decision and also various other decisions which were delivered by the Tribunal, post amendment to the provisions to Section 4 of Central Excise Act, 1944. He would submit that the decision of the Tribunal in the case of Cable Corporation of India Ltd. 2008 (85) RLT 759 (CESTAT-Mum) is one such decision and submits that the amount which was collected even if is in excess of actual, need not be included in the assessable value is the decision. 4.1 It is his submission that the appellant being a Publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression of facts. It is his submission that Hon ble Member (Technical) was correct in coming to the conclusion that that the company like IOCL cannot be said to be ignorant of law and no explanation has been offered as to how this happened and what steps have been taken. It is his submission that in the absence of any information of collection and in the absence of any evidence that such collection was informed to the department, the extended period invoked in the Show Cause Notice was correct. He would also draw my attention to the Order-in-Original and more specifically to the defence taken by them before adjudicating authority and submit that appellant had only contested the interest liability and the penalty liability and had not contested the duty demand. For this purpose, he would draw my attention to the Page 7 of Order-in-Original. He would submit that the order of the ld. Member (Technical) is correct. 6. In the rejoinder, ld. Counsel, drew my attention to the Para 9 of Order-in-Original and submits that during the personal hearing, the appellant had clearly taken plea that there is no suppression of fact and the duty paying documents like invoices and returns were subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by bottling plants for delivery of LPG cylinder up to dealer premises, in the case of Idcol Ferro Chrome Alloys, the amount collected was in respect of transportation charges, and in the case of Rine Engineering Ltd., the issue was collection of freight charges and in the case of Cable Corporation of India Ltd., the issue was freight charges. I would like to mention here in the case of Cable Corporation of India Ltd., there was a difference of opinion and the matter was referred to 3rd Member. The 3rd Member, following the judgment of Hon'ble Apex Court in the case of Baroda Electric Meters Ltd., agreed with the view taken by ld.Member (Judicial). It is also seen that in the recent judgment of co-ordinate Bench in the case of Mercedes Benz India Pvt.Ltd. 2010 (260) ELT 149 (Tri-Mumbai), the co-ordinate Bench has taken a view that post 1.4.2000, when the provision of transaction value was brought into, the law position remains the same. I may respectfully reproduce the relevant portions of the judgment. "6...........We are also of the view that the decision of the Hon'ble Supreme Court with regard to the nature of the excess freight would not have been different, had their lor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Act, 1944 read with Rule 4 of Central Excise Rules, 2002 by invoking period of limitation. The argument of the ld.Counsel that it is immaterial whether the appellant had discharged Central Excise duty liability prior to issuance of Show Cause Notice or otherwise, but he can challenge the duty liability on limitation, is a correct proposition of law. The fact remains that the Show Cause Notice has demanded the duty from the appellant by invoking extended period, and they are well within their legal right to challenge the same before adjudicating authority and/or before Tribunal. It is seen that the appellant has taken this plea in the personal hearing before adjudicating authority, wherein it was clearly argued that the demand of duty is time barred, as there is no suppression of fact and hence the claim of SDR that the appellant did not contest the demand of duty before the authorities seems to be incorrect. 12. As regards extended period of limitation, I find that there is no dispute that the worksheet attached to Show Cause Notice had calculated the amount of differential duty which has to be demanded from the appellant, was in respect of excess sales tax collecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customers as a dealer. It is also undisputed that the appellant is a Public Sector Undertaking. In my considered view, the ratio of case-laws cited by ld.Counsel would squarely apply to this case and I hold that there cannot be any intention of the appellant to evade payment of duty. 14. In view of the foregoing, the Difference of opinion is answered as under: i) The proposal in the Show Cause Notice was for confirmation of demand of duty and the appropriation of duty already deposited by the appellant. ii) Since there is a proposal in the Show Cause Notice for confirmation and appropriation of demand of duty, an order is required to be passed for duty confirmation on the appellant. iii) Excess recovery made by the appellant is required to be added in the assessable value of the final product and duty is not required to be confirmed based upon the various decisions and reasoning given hereinabove. iv) In the light of various decisions and judgment of Apex Court in the case of Baroda Electric Meters Ltd., it has to be held that difference between excess recovery of sales tax and actual quantity of tax paid to Reliance Industries Ltd. has to be held as profit of non-manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
