Case law

Custom, Excise & Service Tax Tribunal · 7 Feb 2012

M/S. Hindustan Petroleum Corpn. Ltd vs Commissioner Of Central Excise

Legal principle

Imported customs duty paid goods are 'excisable goods' under Section 11D(1) of the Central Excise Act, but the amount collected as duty thereon is recoverable only from the manufacturer/producer or the importer under Section 28B of the Customs Act, and not from a mere dealer or terminal-keeper who is neither.

Court decision

The Larger Bench held that imported customs duty paid goods falling under the Schedule to the Central Excise Tariff Act, 1985 are 'excisable goods', but duty under sub-section (1) of Section 11D of the Central Excise Act is payable only by the manufacturer or producer or importer (under Section 28B of the Customs Act). Since the appellants were not the manufacturer or producer of the imported goods, duty was not payable by them, and the reference was answered accordingly in their favour.

Facts

The appellants (HPCL, IOCL and other public sector oil companies) stored imported customs duty paid (CDP) petroleum products together with indigenous products in the same tanks and cleared them under a common invoice series. On clearances of CDP stock, they collected from their dealers an amount shown as excise/customs duty in the invoices but did not credit it to the Central Government; this was noticed during scrutiny of RT-12 returns from 1.1.1993. Periodical show-cause notices were issued under Section 11D(1) of the Central Excise Act for 1.1.1993 to 31.12.1997 and 1.7.1998 to 31.10.1998, and demands were confirmed under Section 11D of the Central Excise Act read with Section 28B of the Customs Act. A Larger Bench of the Tribunal was constituted on a reference on the interpretive question.

Key provisions