TMI Blog2012 (6) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 11D of Central Excise Act, duty is not payable. - E/392-393/2003-BAN and E/3464/2005-DEL - M/187/2012-WZB/C-II(EB) - Dated:- 5-3-2012 - S S Kang, Ashok Jindal, Sahab Singh, JJ. For Appellants: Shri M H Patil with T C Nair, Advs. For Respondent: Shri V K Singh, Addl. Commissioner Per: Ashok Jindal: The following reference has been made before us :- "Whether imported custom duty paid goods falling in any of the Schedules to the Central Excise Tariff Act, 1985 would come within the ambit of the expression "excisable good" used in the text of sub-section (1) of Section 11D of the Central Excise Act." 2. Before going into the arguments we have to see in what context this reference has been made before us. Therefore, it is important to discuss the facts of the case. 3. Facts of the case are that the appellants are public sector undertakings holding Central Excise Registration and are the manufacturer of petroleum products. They are having storage tanks and are receiving imported and indigenous petroleum products under D-3 intimation filed by them and indigenous non-duty paid product on AR-3A and also duty paid petroleum products from other manufacturers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998. The show-cause notices were adjudicated and finally demands were confirmed against the appellants under Section 11D of the Central Excise Act read with Section 28B of the Customs Act. Therefore, the appellants are in appeal before this Tribunal. 4. The dispute is that whether the duty charged by the appellant in their invoices on customs duty paid stock is recoverable as per the provisions of Section 11D(1) of the Central Excise Act or not? 5. Heard both sides. 6. During the course of arguments the learned Counsel for the appellants relied on the following case laws :- 1. HPCL Ltd. v. Commissioner of Central Excise, Hyderabad - 2002 (149) E.L.T. 1294 (Tri-Chennai). 2. Order No. C.II/2807-12/WZB/2002, dated 12-9-2002 in Appeal Nos. C/220 to 224/2000-Mum (HPCL and Others v. Commissioner of Customs, Pune). 3. BPCL v. Commissioner of Central Excise, Meerut - 2002 (146) E.L.T. 646 (Tri. - D). 4. Manager (Terminal), IOCL v. Commissioner of Central Excise, Visakhapatnam - 2007 (211) E.L.T. 590 (Tri. Chennai) 5. CCE, Managalore v. IOCL - 2005 (191) E.L.T. 356 (Tri.-Bang.) . 6.1 The learned Counsel further submitted that although the issue has attaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion "every person" occurring in Section 28B of the Customs Act has to be read down as the importer. He drew our attention to the Board's Circular dated 7-11-2000 wherein the issue was examined and it was clarified that "the amended provisions are to be construed as the original enactment proceedings if any, for the recovery of the sums of the nature specified in sub-section (1) of Section 11D of the Central Excise Act, 1944 need therefore, only be initiated against a manufacturer who is liable to pay excise duty in terms of the amended provisions. It is presumed that the Commissioners have already initiated appropriate action in this direction." He also drew our attention to the Board's Circular dated 27-2-2009 wherein the Board has concurred that the decision of this Tribunal in the BPCL case as reported in 2002 (146) E.L.T. 646 (T) wherein it was held that "no demand could be raised against the appellant under Section 11D(1) as they were not the manufacturer of the concerned goods." This issue was discussed in Board meeting held on 23-7-2008. In view of Hon'ble Supreme Court's decision dated 26-7-2004 in the case of M/s. BPCL [2004 (172) E.L.T. A133 (S.C.)] , the Board decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the reference before us is that "whether the imported custom duty paid goods falling in any of the Schedules to the Central Excise Tariff Act, 1985, would come within the ambit of the expression "excisable goods" used in the text of sub-section (1) of Section 11D of the Central Excise Act or not." 10.1 To deal with the issue, we have to see the provisions of Section 11D during the relevant time which is reproduced here as under :- "Section 11D. Duties of excise collected from the buyer to be deposited with the Central Government. - (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, every person who has collected any amount from the buyer of any goods in any manner as representing duty of excise shall forthwith pay the amount so collected to the credit of the Central Government." 10.2 On examination of the provisions of Section 11D(1) during the relevant time i.e. during the period 1-1-1993 to 31-10-1998, every person who has collected an amount from the buyers of any goods in any manner amounts (representing duty of excise) shall for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court of Andhra Pradesh, the constitutional validity of Section 11-D, before its amendment, was under challenge along with other provisions. In order to uphold the constitutionality of the provisions the High Court read down the expression "every person" in sub-section (1) of Section 11-D as the manufacturer/producer as also the expression 'every person' appearing in Section 28-B of the Customs Act as the importer. It was the above view that has been expressed by the statutory amendment under Section 103 of the Finance Act, 2002 with retrospective effect from 20-9-91. 10.5 Under this circumstances the appellants contentions are to be accepted under Section 11D and it is not the manufacturer of the concerned goods and the observation of the Tribunal were confirmed by the Hon'ble Apex Court. 10.6 In the case of Manager (Terminal), Indian Oil Corporation Ltd. v. CCE, Visakhapatnam - 2007 (211) E.L.T. 590 (Tri.-Chennai) this Tribunal has observed that- "5. We have examined the records and considered the submissions made by both sides. The appellants had been permitted to store customs duty paid imported goods along with such goods produced indigenously on which duty was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that whether the duty collected by the appellants on imported custom duty paid goods, excise duty is payable as per the provisions of sub-section 1 of the Section 11D of the Central Excise Act. 10.9 We have seen that although the goods are excisable but duty can be recovered from the assessee in the provisions of Section 11D(1) of the Central Excise Act from the manufacturer/producer or importer under Section 28B of the Customs Act. 11. In view of the above observations, the reference is answered as under:- On imported customs duty paid goods falling under the Schedule of Central Excise Tariff Act, 1985, are excisable goods but duty is payable under sub-section 1 of Section 11D of the Excise Act by the manufacturer or producer or importer. 11.1 As in the facts of the reference in hand as the appellants are not manufacturer or producer therefore, as per the provisions of sub-section (1) of Section 11D of Central Excise Act, duty is not payable. 12. The reference is answered accordingly. 13. Registry is directed to place the files before the Referral Bench to deal with the issue in terms of the reference answered. (Pronounced in open Court on ...................) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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