TMI Blog2013 (2) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ose provisions cannot apply to dealers under the Central Act because the Central Act makes similar provisions. The Central Act is a self-contained code which by charging section creates liablity for tax and which by other sections creates a liability for penalty and impose penalty. Section 9(2) of the Central Act creates the State authorities as agencies to carry out the assessment, reassessment, collection and enforcement of tax and penalty by a dealer under the Act. Thus respectfully follow the decisions of in Khemka & Co.'s case (supra) and India Carbon's case 1997 (7) TMI 566 - SUPREME COURT OF INDIA) hold that interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf. Since the provisions of the OID Act do not contain any provision for levy of interest on delayed payments of cess, the respondents are not entitled to demand that the petitioner pays interest on the alleged delayed payments of cess. Also in complete agreement with the decision in Devi Dass Gopal Krishan's case (2000 (12) TMI 108 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH) there is nothing in the language ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its extraction, is stored for a while in the adjoining on shore facilities and after separation of water and sediments is taken back to a sea point through pipe line from where it is shipped out periodically, to the two refineries through the marine tankers deployed by them. 4. The crude oil produced from Ravva field is subject to "cess" under section 15 of the Oil Industry (Development) Act, 1974 (for short "OID" Act). The cess is levied and collected on items specified in the schedule i.e. crude oil and natural gas, which is produced in India (including the continental shelf thereof) and (a) removed to a refinery or factory; or (b) transferred by the person by whom such item is produced to another person. Since the OID Act did not provide for an independent mechanism for collection of cess, clause (4) of Section 15 states that the provisions of the Central Excise and Salt Act, 1944 and the rules made thereunder, including those relating to refunds and exemptions from duties shall, as far as may be, apply in relation to the levy and collection of duties of excise leviable under this section and for this purpose, the provisions of that Act (i.e the Central Excise and Salt Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner to follow the procedure prescribed in the trade notice no.13/2001 dated 14.3.2001 referred to above. 8. In view of this, the petitioner convinced both the refineries on the need to furnish the received quantities in a time bound manner. While HPCL agreed to furnish such figures on the basis of the quantities received at their refinery, BRPL expressed that it is impossible for them to give shipment wise received quantities at their refinery gate. They pleaded that from Haldia Port, they have to transport the crude oil through a pipe line to a distance of 1100 kms and that since certain quantities always remain in the pipeline, it is not possible for them to identify the exact quantity received against any particular shipment and consequently the month. It offered to furnish the quantity received from the petitioner at Haldia Port and accordingly it started furnishing details of the quantities received from the petitioner at Haldia Port from January 2004. Thus, from January 2004, the petitioner paid cess on the quantities certified by the refineries as received on or before 20th of the following month. 9. The petitioner contends that for the period prior to January 2004, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its knowledge against the said demand. 14. The petitioner replied vide letter dated 18.6.2004 questioning the jurisdiction of the department to levy interest on the alleged delayed payment and also disputing taking 5th of the following month as the due date. 15. The petitioner also sought intervention of the first respondent which is the Apex Body for Central Excise matters by its representation dated 4.10.2004. 16. While so, the 3rd respondent issued another notice dated 22-11-2004 to pay a sum of Rs.96,18,789/- as demanded in O.C.No.338 dt.01-06-2004 within ten days from the date of receipt of the said notice. 17. The petitioner by reply dt.02-12-2004 disputed its liability to pay any amount as interest and raised the same contentions as it had raised before the 4th respondent and enclosed a copy of its response sent to the 4th respondent to the 3rd respondent. 18. The 3rd respondent by letter C.No.V/30/8/2004-STAT dt.28-12-2004 rejected the petitioner's contentions and reiterated the earlier demands made towards interest for Rs.1,91,48,778/-. Later another notice C.No.V/30/8/2004-STAT dt.29-12-2004 was issued by the 3rd respondent calling upon the petitioner to pay Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the actual quantity of net crude oil received by the refinery or factory determined after test results; that the oil company shall debit the amount of cess in the PLA and therefore the 2nd respondent has no jurisdiction or power vested in him to amend the Government of India notification dt.20-05-1988 by issuing Circular No.C.No.V/30/253/2003-Tech-II dt.16-04-2004. (c) The Government of India has not fixed any specific deadline as a due date for payment of cess and instead, it had allowed time till 20th of the following month to file the return along with the payment particulars and therefore the oil producing companies are allowed time to pay cess after they have received details of receipt quantities from refineries before 20th of the following month and that in view of the practical difficulties being faced by the petitioner in receiving details of the receipt quantities from the refineries, the respondents are bound to fix a reasonable date as due date after due deliberations with the oil refineries. (d) Assuming that the due date for payment of cess is the 5th of the following month, no interest is payable if payment of cess is made during that month under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; under the said Act, the person liable to pay the cess on crude is the producer company on the self-assessment basis and it is their responsibility to ascertain the receipt quantities against the dispatches made; nowhere does the law cast any responsibility on the refinery and as such the department cannot approach the refineries in this matter. (b) As the provision of section 15 (4) of the OID Act is inclusive, the issue of collection of interest on delayed payment of duty becomes automatically "substantive" in terms of the said section. (c) Duty includes interest as well. Therefore the provisions of the Central Excise Act 1944 and the Rules made thereunder including those relating to refund and exemptions from duties shall, as far as may be, apply in relation to the levy and collection of duties of excise leviable under Section 15 (4) and for this purpose, the provisions of the Central Excise Act shall have effect as if that Act provided for the levy of duties of excise on all items specified in the schedule. Therefore the duties of excise to be collected as cess under the OID Act, have to be collected as per the provisions of the Central Excise Act and the Rules made thereu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and- (a) removed to a refinery or factory; or (b) transferred by the person by whom such item is produced to another person, a duty of excise at such rate not exceeding the rate set forth in the corresponding entry in column 3 of the Schedule, as the Central Government may, by notification in the Official Gazetee, specify: Provided that until the Central Government specifies by such notification the rate of the duty of excise in respect of crude oil (being an item specified in the schedule) the duty of excise on crude oil under this sub-section shall be levied and collected at the rate rupees sixty per tonne. (2) Every duty of excise leviable under sub-section (1) on any item shall be payable by the person by whom such item is produced, and in the case of crude oil, the duty of excise shall be collected on the quantity received in a refinery. (3) The duties of excise under sub-section 91) on the items specified in the Schedule shall be in addition to any cess or duty leviable on those items under any other law for the time being in force. (4) The provisions of the Central Excises and Salt, Act, 1944 and the rules made thereunder, including those relating to refunds an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has not already been paid, the proper officer shall cause a notice to be served upon the oil producing company requiring them to make payment of the amount assessed within ten days of the service of the notice. (v) In case of oil company extracting oil in places situated in different Collectorates and sending crude oil to different Collectorates, the obligation for payment of cess should be on the Regional Office of such company and officer in whose jurisdiction such Regional office is situated. (vi) After the return has been checked by the proper officer the original copy of the return along with the original copy of the PLA shall be sent to the Chief Accounts Officer, the duplicate return shall be sent to the Assistant Collector in charge of Division, the triplicate shall be returned to the oil producing company and the quadruplicate returned along with copies of delivery tickets and duplicate copy of the PLA shall be retained by the proper officer for records. (vii) The producing unit should also furnish a list of records maintained and reports/returns submitted by them to the different authorities to the Assistant Collectors of Central Excise." Subsequently the 1st re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment effective from 01-04-2003 to Rule 8 (3) of the Central Excise Rules; that when the OID Act was enacted, the provisions of Section 11AB of the Central Excise Act and Rule 8 (3) of the Central Excise Rules providing for payment of interest did not exist and after the said amended provisions in the Central Excise Act and Rules providing for interest, the provisions of the OID Act are not amended correspondingly; that in the absence of amendment of the provisions of the OID Act, which had never contemplated payment of interest and which alone is the charging Act, the amended provisions of the Central Excise Act and the Central Excise Rules cannot be applied against the petitioner. 29. On the other hand, the respondents contend that the provision of section 15 (4) of the OID Act is inclusive; that the issue of collection of interest on delayed payment of duty becomes automatically "substantive" in terms of the said section; that duty includes interest as well; that therefore the provisions of the Central Excise Act 1944 and the Rules made thereunder including those relating to refund and exemptions from duties shall, as far as may be, apply in relation to the levy and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the process of such payment and collection. It relied upon Section 9 (2) of the Central Act which stated as follows: "S.9 (2): Subject to the other provisions of this Act and the Rules made thereunder, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re- assess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable wader the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax. registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. There is no lack of sanction for payment of tax. Any dealer who would not comply with the provisions for payment of tax, would be subjected to recovery proceedings under the Public Demands Recovery Act. A penalty is a statutory liability. The Central Act contains specific provisions for penalty. Those are the only provisions for penalty available against the dealers under the Central Act. Each State Sales Tax Act contains provisions for penalties. These provisions in some cases are also for failure to submit return or failure to register. It is rightly said that those provisions cannot apply to dealers under the Central Act because the Central Act makes similar provisions. The Central Act is a self-contained code which by charging section creates liablity for tax and which by other sections creates a liability for penalty and impose penalty. Section 9(2) of the Central Act creates the State authorities as agencies to carry out the assessment, reassessment, collection and enforcement of tax and penalty by a dealer under the Act." 32. In India Carbon's case (2 supra), a question arose whether the assessee was liable to pay interest at the rate specified under the provisions of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embodied in the 1983 Act in the form of Section 3(4). However, there is nothing in the language of Section 15(2) of the 1966 Act or Section 3(4) of the 1983 Act from which it can be inferred that it authorises the Central Government to charge interest on the delayed payment of cess. Section 11AA was inserted in the 1944 Act with effect from 26.5.1995 by amending Act No. 22 of 1995. However, no corresponding amendment was made in Section 15(2) of the 1966 Act or Section 3(4) of the 1983 Act so as to empower the Central Government to charge interest in the case of default in the payment of cess. Therefore, we are inclined to agree with Shri Batta that Section 11AA of the 1944 Act cannot be invoked by the respondents for charging interest on the delayed payment of cess by the petitioner." 34. We respectfully follow the decisions of the Supreme Court in Khemka Co.'s case (AIR 1975 SC 1549) and India Carbon's case (AIR 1997 SC 3054) and hold that interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf. Since the provisions of the OID Act do not contain any provision for levy of int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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