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TMI Blog2020 (9) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were recorded by the Department, but copies were not handed over to them. Consequently, the Department was directed to hand over all the statements in their possession to the appellant which were relied upon in passing the impugned order.The Department accordingly submitted copies of the statements recorded during the course of investigation to the Registry for record and also handed over to the appellant. To appreciate the dispute between the parties, it is necessary to visit the facts of the case. 2. Briefly stated, the Appellant M/s IOCL, a Public Sector Undertaking, are engaged in the manufacturer and distribution Petroleum products. Their three locations was issued with a common show cause notice on 19.05.2006 alleging that that even though their Miraz unit sold Motor Spirit blended with Ethanol and collected duty on the whole quantity of Motor spirit including duty on Ethanol, but failed to discharge the excess duty collected on ethanol under Section 11D of Central Excise Act, 1944. To elaborate, it is the allegation of the Revenue that M/s IOCL,Vasco at Goa has cleared various petroleum products including motor spirit falling under Chapter 27 of the Central Excise Tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the sale of Ethanol in the mixture of EBP. He has submitted that to substantiate the allegation in the show-cause notice, however, no evidence of recovery of price/duty separately on the quantity of Ethanol blended by the appellant was brought on record by the Department. On the contrary, it is submitted that from the allegation levelled show-cause notice, it is clear that the conditions laid down under Section 11D of Central Excise Act, 1944 are not satisfied at all. It is his contention that the appellants sold EBP as Motor spirit at a fixed composite price per liter and have not recovered "any amount representing as duty of excise" separately on the Ethanol in the invoice. Hence, demand under Section 11D of Central Excise Act, 1944 on the quantity of ethanol blended with Motor spirit is unsustainable. 3.1 Further, he has submitted that in the show-cause notice, Section 11A(1) read with Section 11D(1) have been invoked in demanding duty whereas Section 11AB and 11DDof Central Excise Act,1944 for recovery of interest. He has submitted that such practice of invoking different alternate provisions in the show cause notice is incorrect and bad in law. Hence, the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.4 Further, analyzing the statements of P. Subbaraj, the learned Advocate has submitted that Mr. Subbaraj was not aware of all the facts in as much as when necessary intimation to the Department about the activity of blending of ethanol with motor spirit was communicated by the appellant on 15.01.2001 and 25.01.2001, but he has stated that no such intimation was given earlier. Therefore, his statements indicating that no information in this regard submitted to the department is incorrect being contradictory to the facts on record and hence not acceptable. In his statement dated 4.9.2002, Mr. Subbaraj has submitted that prior to 12.01.2002 excise duty was shown separately in the invoices and from 12.01.2002, the price was shown as inclusive of excise duty. Based on this fact, it is inferred and stated that appellants had charged and collected Central Excise duty on the additional quantity of motor spirit obtained by them to the extent of ethanol used for blending with motor spirit to obtain EBP, which is not correct. In his statement dated 21.10.2002, he has further stated that ethanol contained in EBP were sold at the price applicable to motor spirit; there was no difference of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44. 3.6 Further, he has submitted that the Tribunal in the case of CCE, Coimbatore Vs. Everest Industries Ltd. vide Final Order No. 40837 of 2019 dated 12.06.2019 held that in the invoices if the price shown is inclusive of excise duty and the duty element is not shown separately, then provision of Section 11D is not attracted. He has also referred to the judgment of this Tribunal in the case of National Organic Chemical Industries Ltd.Vs.CCE,Mumbai-III 2000 (115) ELT 70(Trb.) in support of his contention that the provisions of Section 12A and 12B would apply only for the purpose of refund of duty and not for Section 11D. 3.7 The learned Advocate has further submitted that in any case invoices dated 15.4.2001 and 11.2.2002 issued by the appellant since pertains to the period prior to the period in dispute, hence cannot be relied upon in directing recovery for the period from 3.5.2002 to 26.12.2002. 3.8 The learned Advocate has also submitted that the Commissioner, Goa has no jurisdiction to issue show cause notice and confirm the demand on IOCL, Miraj, which fall under the jurisdiction of Pune-II Commissionerate. Therefore, the demand is not sustainable on this count alone. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r spirit and they did not mention specifically in their sales invoices, description of the goods as blended or unblended motor spirit; it is mentioned invariably in the invoice as motor spirit only. Further, he has stated that they have recovered applicable duty from their customers as per the price list effective during the respective period and since there was no advice from their head office, the central excise duty so collected from their customers have not been paid to the Department. In his further statement dated 4.9.2002, Shri Subbaraj had disclosed that as and when they were having stock of ethanol, they were supposed to sale blended motor spirit only and when there is no stock of ethanol they cleared only motor spirit. But, in both the cases, the rate per KL motor spirit is one and the same. Thus, they charged and collected central excise duty on the additional quantity of MS obtained to the extent of ethanol used by them for the purpose of blending. ShriSubbarajhas categorically admitted that they have collected excess amount of central excise duty but failed to deposit the same with Central Government. Shri Subbaraj further referring to various invoices issued during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of Hon'ble Gujarat High Court in the case of Patlad Bulkhi Das Mills Co. Ltd. vs. UOI -2000 (126) ELT 269 (Guj), non-mention of sub-section (2) of Section 11D would not vitiate the action. Further, he has submitted that what has been sought to be recovered is not duty of excise but excess amount recovered as duty of excise by the Appellant from their customers. 4.6 On the issue of jurisdiction in raising the demand, the learned DR has referred to the instruction dated 21.8.2003 issued by Commissioner of Central Excise and Customs, Pune; also he has referred to the judgment of Pahwa Chemical - 2008 (181) ELT 339 (SC). 4.7 Further, he has submitted that as held by the Tribunal in the case of Indian Oil corporation Vs. CCE,Vadodara - 2011(263) ELT 698(Tri-Ahmd.)when excise duty collected in excess what was shown in the invoice, then the same was required to be deposited with the Government, it was immaterial that the excess duty was collected by the warehouse. The plea that only manufacturers were liable to deposit the excise duty also rejected by the Tribunal. It was held that the circumstances under which duty was collected and provision of other laws, areirrelevant for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue involved in the present appeal for determination is whether the appellants are required to deposit the amount of Rs. 75,94,886/- on the quantity of ethanol of 712.290 KL blended with 13533.580 KL of Motor Spirit(Petrol),when the resultant quantity of 14245.850 KL of EBP was sold as Motor Spirit ,under Section 11D, and interest under Section 11DD of Central Excise Act, 1944. 6.3 The undisputed facts are that M/s IOCL was having a manufacturing facility at Vasco, Goa where motor spirit falling under Chapter 27 of Central Excise Tariff Act, 1985 manufactured and cleared on payment of duty to their Miraz Depot. At Miraz, the duty paid motor spirit is blended with ethanol in the ratio of 95 : 5 and sold from their as motor spirit only. In the invoices raised during the disputed period 03.05.2002 to 26.12.2002, the price was shown as inclusive of duty. Revenue's allegation is that during the said period, the appellant had received 13533.560 KL of duty paid motor spirit blended with 712.290 KL of Ethanol and obtained total quantity of 14245.850 KL of EBP. It is the allegation that while selling the product, the invoices mentioned the EBP as motor spirit only and the price that was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provisions of this Act or the rules made thereunder, every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder 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." 6.6 As stated above, the Miraj unit receives duty paid motor spirit from their manufacturing Unit at Vasco, Goa and also duty paid ethanol from independent distillers. The Motor spirit and ethanol was blended in the ratio of 95:5 at the time of clearance from the Miraj unit to the customers in tankers. The price per KL of EBP (which was mentioned in the invoice as motor spirit) was similar to the price charged by the appellant for unblended motor spirit to the customers. The Commissioner while adjudicating the demand notice for recovery of excess duty alleged to have been collected on the quantity of ethanol ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the duty on ethanol in the invoices, but not paid to the Government. Therefore, Section 11D of CEA,19449cannot be said to have been attracted. 6.8 Further, we have gone through the statements of Shri Subbaraj. In all his statements, it is stated that the duty in the invoices prior to the disputed period were shown separately, whereas during the disputed period, it was shown as inclusive of duty. On further being asked by the department, he has stated that the resultant EBP which contains 5% of ethanol since not suffered duty but after blending with motor spirit duty was collected on the total quantity of EBP, therefore, the duty attributable to ethanol theoretically in the total duty paid on the price of motor spirit is payable but not paid. We do not find merit in the said understanding of the Shri Subbaraj in stating that excess duty collected is payable but not paid under Sec. 11D of CEA,1944 because of change in the pattern of reflecting duty on the invoice. Therefore, his understanding of the applicability of Sec.11D cannot be the basis for confirming the demand. 6.9 The learned AR for the Revenue has vehemently argued that the issue is covered by the judgment of this T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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