9911796707
TMI Blog1996 (4) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... of impost under the provisions of section 5A of the Kerala General Sales Tax Act. 3.. The petitioner is a wholly owned and controlled Central Government undertaking having the wholesale right of purchase of petroleum products manufactured by M/s. Cochin Refineries Ltd. The petroleum products from the Cochin Refineries Ltd., move through pipelines to the tanks/warehouses licensed by the Central excise situate within the State of Kerala and thereafter by ships to the tanks/warehouses licensed by the Central excise and situated outside the State either by rail or road transport to the depots of the Indian Oil Corporation, to the dealers and consequently to the customers. Incidence and levy of tax under the provisions of the Kerala General Sales Tax Act, 1963, is provided by Chapter 3 thereof and it would be elementary that section 5 of the Kerala General Sales Tax Act, 1963, enacts that petroleum products are taxable at the point of sale in the State by any oil company liable to tax under the aforesaid chapter, except where the sale is by any oil company to another oil company. It means and it is provided that the petroleum products purchased and moved from the Cochin Refineries Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er States creating separate independent and exclusive liability at the time of removal of the goods from those warehouses outside the State of Kerala. Reliance was placed not only on the then existing rule position, but also submissions were founded with reference to the contention that amendments during the period of interregnum if taken into consideration, licensed warehouses have been fixed with the liability of payment of excise duty. 7.. The authorities below considered the situation as completely governed by the Full Bench decision of this Court by the Hindustan Petroleum Corporation's case [1993] 89 STC 106 to hold that the excise duty element is the liability and is payable by the petitioner, being in discharge of the liability of M/s. Cochin Refineries Ltd. and as such it will form part of the purchase turnover of the petitioner under the above referred provisions of the Kerala General Sales Tax Act, 1963. In other words, the authorities considered the question as fully covered by the Full Bench decision of this Court. What is contended is a rigorous attempt to take out the situation from the binding impact of the Full Bench decision of this Court in the Hindustan Petrol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, it cannot be said that the factual peculiarity placed by the learned counsel would in any way take away the matter from and out of the decision of the Full Bench. 12.. Before the Full Bench the assessee is also an oil company (Hindustan Petroleum Corporation Ltd.) dealing in petroleum products, manufactured by the Cochin Refineries Ltd., another oil company. It is also necessary to emphasise that the Cochin Refineries, it is stated, is permitted to store the manufactured products without payment of duty, in bonded warehouse and it was thereafter the Cochin Refineries sold the goods in question to the Indian Oil Corporation. Indian Oil Corporation in turn sold the products in question to the Hindustan Petroleum Corporation. Thus the factual situation except of change of the name of the Corporation is identical. There was no sales tax payable by oil companies in respect of sale of petroleum products if the sale is from one oil company to another oil company. The situation is also identical at the next step because there was no question of payment of tax arising in the sales of petroleum products by Cochin Refineries to Indian Oil Corporation and Indian Oil Corporation to the Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the assessee on the taxable turnover relating to the purchase of oil. The Full Bench reached this conclusion after considering the meaning in the enactment of what is known as taxable turnover, meaning aggregate amount for which the goods are either bought or sold, supplied or distributed by a dealer and shall include any sum charged for anything done by the dealer in respect of the goods sold at the time of, or before, the delivery thereof or any cash or other discount on the price allowed. In dealing with the question as to whether the purchase turnover of the Corporation will take in the excise duty element as well, on facts, the Full Bench referred to the sale bills issued by the Indian Oil Corporation to the Hindustan Petroleum Corporation emphasising that the bills take in only the price of the oil and not the excise duty element. It is because excise duty has to be paid by the Hindustan Petroleum Corporation as and when it released the goods from its bonded warehouse. The Full Bench has approached to the answer yet by another passage, by examining the provisions of the Central Excise Act, 1944 and the Rules made thereunder in paragraph 7 of the judgment. 15.. Referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty in respect of the manufacture of petroleum products is leviable on Cochin Refineries Ltd., and it is the liability of Cochin Refineries to pay excise duty before removing the goods. It is reiterated that the excise duty is payable by the manufacturer and therefore the duty is paid by the assessee in discharge of the liability of the Cochin Refineries Ltd. The liability certainly arose before removing the goods for delivery to a dealer, and therefore he will have to pay excise duty. It is specified that when the goods are sold to Indian Oil Corporation, it is natural that the sale price of the products alone would form the bill amount and it will have to be understood that the collection of the Central excise duty payable by the Cochin Refineries Ltd. would be understood to have been postponed as the collection will not serve any purpose at that point of time, more so, when there are no sales tax also to be collected. In the context it is emphasised in the concluding paragraph that by the provisions of the Central Excise Rules, especially the provision for depositing in bonded warehouse without payment of duty, and by the requirement of executing bonds, the ultimate collection o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer to the strenuous submissions of the learned counsel based on the amendment of the rules. The learned counsel submitted that the Central Excise Rules were drastically amended in February, 1986. To buttress the submission the learned counsel strenuously took us through rules 156(A) and 156(B) in regard to the removal of goods from one warehouse to another. This procedure is available in rule 156(A) requiring application in triplicate and in proper form to the officer-in-charge of the warehouse atleast 24 hours before the intended removal. In regard to such eventuality, consequences of failure are dealt with in section 156(B). In fact in the petition reliance is placed on the provisions of the same rule [156(B)]. 21.. The provision deals with the situation of failure on the part of the concerned in presenting the application in triplicate as required under rule 156(A). It is provided that if such is the situation, the concerned consignor should pay the duty leviable on such goods within 10 days of the notice of demand and if the duty is not paid, he shall not be permitted to make fresh removal of any goods from one warehouse to another until the duty is paid. Rule 156(2) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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