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TMI Blog2015 (11) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... , by cheque (for crude oil). From perusal of the debit note it is evident that part of the amount is shown as processing charge and a part of it is shown as excise duty. The respondent has taken or credited the full amount of debit note including excise duty amount to processing charges account in its books. After processing of the crude oil the respondent-assessee have sold the refined oil and have in compliance with the provisions of Excise duty collected and paid the applicable duty, which is an admitted fact. The Revenue felt that the amount reflected in the debit note as Excise duty, amounts to such collection by the respondent-assessee, which is required to be deposited with the Central Government in terms of the provisions of Section 11D of the Act. Accordingly show-cause notice in February, 2008 was issued requiring the respondent to show-cause as to why the same should not be adjudicated and collected, being an amount of Rs. 23,06,387/ along with interest. 3. The show-cause notice was adjudicated vide order in the Order-in-Original dated 20/10/2008, it was held that the respondent-assessee is liable to pay the proposed amount under the provisions of Section 11D of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is recovering only price of crude oil and not recovering any job charges from crude oil suppliers which also includes an element of Rs. 1 per kg of Central Excise duty. Ordinary prudent suppliers will not honour any bill towards excise duty if he has supplied the crude only, as everyone knows that the taxes like excise duty, sales tax is charged only to the customer and not to the supplier. Further the appellant was required to pay value of crude oil only as against the bill of refined oil raised by the suppliers. In order to adjust the bill for refined oil to the extent of cost of crude oil, the job work bill/debit note is a requirement of this paper transaction. Once it is understood that the appellant is required to pay only cost of crude oil as against bill for refined oil raised by the supplier, it is very easy to comprehend that, by raising the job work bill/debit notes, the appellant has not recovered anything. When effectively nothing has been recovered, the debit notes also including the component of excise duty cannot be construed to have recovered the amount representing excise duty. This job work bill/debit note can be issued showing any head viz. job char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned edible oil physically from them to appellant or back; that the appellant paid them the bill by cheque for the refined oil by deducting the amounts of debit notes for job work charges plus the excise duty; that the reason for not selling the cotton seed wash oil to the refineries and for adopting the above procedure was that the State Government had imposed Sales Tax on the cotton seed wash oil as well as on the refined cotton seed oil; that if cotton seed wash oil was sold to the refineries then they did not get set off the sales tax paid on the crude oil; however if they got the refined oil manufactured on job work basis then they wee entitled to get the set off. From what has been deposed by Mr. B. B. Patwari in the statement it is clear that by such method, if at all, they are deriving sales tax benefit which has nothing to do with Central Excise, thus the adjudicating authority's observation to the extent "however it is not clear from reply what benefit those suppliers were gaining" it not correct. Further even if the benefits available either to appellant or suppliers are not forthcoming, the same cannot be reason for confirmation of demand under Section 11D. 12. The app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has been furnished that the amounts mentioned in debit notes were actually realized from the suppliers. What is important is recovery of an amount in the name of Central Excise Duty and not mere raising of bill/debit note to that effect. Under the circumstances, the confirmation of demand under Section 11D in not tenable. 15. During the relevant period, Section 11D stipulated that Any person who is liable to pay duty under this Act or Rules made there under, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or Rules made there under, FROM THE BUYER OF SUCH GOODS in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. Therefore, the requirement of the law is that the amount which is collected from buyer of such goods, in addition to the excise duty paid by the buyer should be paid back to the Central Government under Section 11D. As explained above, the suppliers of crude oil can by no stretch of imagination can be termed as buyers of refined oil. In fact, they are the suppliers of crude oil and buyers of refined oil are various custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case it was book adjustment only and had not recovered from the raw material supplier, as it was adjusted in the books of account by way of adjustment entries. Accordingly the learned A.R. prays for setting aside the impugned order and restoration of the Order-in-Original. 5. Heard. The learned Counsel for the respondent-assessee defended the facts and vehemently argued that the basic ingredients for charging of Excise duty under Section 11D, being absent, the Commissioner (Appeals) rightly held in favour of the assessee. It is admitted fact on record that the respondent-assessee received crude oil on which no Excise duty was chargeable. It is further admitted fact that the purchase invoices are for refined oil under the exigency of business, the assessee used to issue debit note as stated hereinabove, for adjusting the amount not payable. In view of the findings in the impugned order the learned Counsel prays for dismissing the appeal of Revenue. This appeal was earlier heard on 1st May, 2015 when the Tribunal directed the Counsel for the assessee to produce the extract of the books of account like, copies of Central Excise account, processing charges account, profit and loss a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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