Legal principle

Where an assessee collects duty from customers calculated on a basis unrelated to the CVD actually paid at ex-bond clearance, the excess so collected is recoverable under Section 28B of the Customs Act, 1962, and the mere description of the levy as 'Customs duty' in invoices does not help unless excess collections were surrendered to a Government mechanism such as the Oil Pool Account under APM.

Court decision

The Tribunal rejected all the cited precedents as distinguishable and rejected the invoice-description claim, holding that up to 9.2.99, when only CVD (no BCD) was paid, whatever was collected was CVD and any excess collection therefor has to be deposited under Section 28B; however, as the CA certificate lacked tanker-wise details of duty recovered, the matter was remanded to the original adjudicating authority to recalculate the differential duty for that period, verify the appellant's statement, and reconsider de novo the subsequent period (where BCD was also paid) in the light of the decisions and further submissions. The case thus went substantially against the appellant for the CVD-only period, with a remand on quantum and the later period.

Facts

M/s Indian Oil Corporation Ltd. imported naphtha through its Kandla terminal, paid CVD at ex-bond clearance on the assessable value of the imported naphtha, but while billing customers calculated duty on the assessable value of indigenous naphtha then prevailing, describing the charge in invoices only as 'Customs Duty/Excise Duty'. The Commissioner of Customs, Kandla (OIO No.KDL/Commr/80/2005 dt.8.9.05) held that IOCL had thus collected amounts in excess of the CVD actually paid to the department and confirmed recovery under Section 28B of the Customs Act, 1962. The Revenue relied on statements of IOCL's Manager (Finance) and Excise Manager showing that Kandla's billing practice departed from internal instructions to collect only actual CVD, unlike IOCL's Hazira terminal. IOCL appealed to CESTAT, West Zonal Bench, Ahmedabad.

Key provisions

• Section 28B, Customs Act, 1962 — Duties collected from the buyer to be deposited with the Central Government
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded