Legal principle

Where petroleum product prices are fixed under the Administered Price Mechanism with excess recoveries surrendered to, and deficiencies made good by, the oil pool account, there is no excess collection of duty and Sections 11D of the Central Excise Act, 1944 and 28B of the Customs Act, 1962 are not attracted.

Court decision

The Tribunal, following its earlier decisions in the appellant's own case (2007 (210) ELT 543 (Tri. Bang.) and 2008 (227) ELT 263 (Tri. Ahmd.)), held that where the price is administered under the APM, the provisions of Section 11D of the Central Excise Act, 1944 and Section 28B of the Customs Act, 1962 are not applicable; the appellant was not required to pay duty under Section 11D. The impugned order was set aside and the appeal was allowed with consequential relief, if any.

Facts

M/s Indian Oil Corporation Ltd. sold petroleum products whose prices were fixed by the Ministry of Petroleum, Government of India under the Administered Price Mechanism (APM). Whenever duty was collected in excess, it was surrendered to the oil pool account, and any deficiency was made good by the oil pool account. The Department (CCE, Chandigarh-I) required the appellant to pay the excess duty collected to the Government under Section 11D of the Central Excise Act, 1944, and the impugned Order-in-Original No. 107/CE/JAL/2005 dated 31.07.2005 of the CCE (Appeals), Jalandhar went against the appellant.

Key provisions

• Section 28B, Customs Act, 1962 — Duties collected from the buyer to be deposited with the Central Government