Legal principle

Under Sec.2(d) of the Central Excise Act, 'excisable goods' are goods specified in the CETA Schedules as being subject to (i.e., liable or open to) a duty of excise—actual levy or payment of duty is not necessary—so imported, customs duty-paid goods falling in the Schedule do not thereby cease to be excisable goods (subject to confirmation by the Larger Bench).

Court decision

The Tribunal did not finally decide the appeals. It recorded the prima facie view that imported, customs duty-paid goods falling in the CETA Schedules are not excluded from 'excisable goods' in Sec.11D(1), but finding this contrary to the co-ordinate bench decisions in HPCL, BPCL and IOCL, it directed the Registry to place the records before the Hon'ble President to constitute a Larger Bench to answer the framed question; neither party obtained a final verdict.

Facts

Hindustan Petroleum Corporation Ltd., a Central PSU, cleared petroleum products (Motor Spirit, SKO, HSD) from a common warehoused stock—partly indigenous non-duty-paid goods procured under bond and partly imported customs-duty-paid ('CDP') goods—to dealers at administered (APM) prices during 1.1.1993–31.12.1997 and 1.7.1998–31.10.1998. On CDP clearances, the invoices mentioned excise duty, and the department, on scrutiny of RT-12 returns, found such amounts had been collected from dealers but not credited to the Central Government. It issued eight show-cause notices under Sec.11D(1) of the Central Excise Act demanding over Rs.13 crores, plus a further notice for over Rs.2.5 crores for the 1998 period. In de novo adjudication the Commissioner confirmed both demands under Sec.11D of the Central Excise Act read with Sec.28B of the Customs Act, and HPCL appealed to the Tribunal.

Key provisions

• Section 28B, Customs Act, 1962 — Duties collected from the buyer to be deposited with the Central Government
• Section 2(d), Customs Tariff Act, 1975 — Duties specified in the Schedules to be levied