TMI Blog2015 (11) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... of this case, like recovery of any amount in the name of duty from the buyers of such goods, that is excisable goods, and such person should be the person liable to pay duty under the scheme of the Excise Act. These elements being absent I conclude that the respondent-assessee was not required to pay any duty under the provisions of Section 11D of the Act. - Decided against Revenue. - APPEAL NO. E/07/10 - - - Dated:- 14-5-2015 - Shri Anil Choudhary, Member (Judicial) For the Petitioner : Shri Sanjay Hasija, Supdt. (A.R.) For the Respondent : Shri Jayesh Doshi, C.A. ORDER Per: Anil Choudhary: The Revenue is in appeal against order of the Commissioner (Appeals) dated 5/10/2009 wherein it is held that the respondent-assessee is not liable to pay any Excise duty under the provisions of Section 11D of the Central Excise Act. 2. The brief facts are that the respondent-assessee received crude oil (cotton seed) from the suppliers, which were mainly the oil industries milling oil from the oil seed. Due to some problem of getting set-off under the Sales Tax Act, the supplier of crude oil raised the bill for refined oil. As the supplier of crude oil was e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of crude oil and not paid to Govt. and hence, same was sought to be recovered under Section 11D of Central Excise Act, 1944. 8. Now it is to be seen as to whether recovery of ₹ 1/- from the suppliers really results in extra collection for the appellant. To understand the crux of the issue, it is necessary to go through once again in the transaction done by the appellant. The appellant refines the oil out of their own crude oil and also out of crude oil supplied by the suppliers. The crude oil supplied by various suppliers is refined and get mixed with the refined oil manufactured by appellant with purchased crude oil. The suppliers used to issue bills for refined oil, though they supply crude oil. The appellant is required to pay price of crude oil only out of the total price charged for refined oil by the suppliers of crude oil. The price of refined oil charged in the bills by the suppliers consists of price of crude oil plus job charges. In order to nullify the amount representing the job charges, the appellant used to issue job work bills/debit notes for the said job charges and thereby reduced the bill to the price of crude oil only. In effect, the amount payable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ultimately results in no undue benefit of ₹ 1/- per kg which is shown as excise duty. In other words, there has been no recovery of any amount, regardless whether it is for job charges or for excise duty, by issue of job charges bill/debit notes. The very purpose of issue of job charges bill/debit notes is to reduce the bill amount of refined oil to the level of cost of crude oil as the appellant is required to pay only cost of crude oil. 10. The adjudicating authority has not accepted the contention of the appellant that the transaction of issue of debit note is book adjustment. On page 16 of OIO it has been stated that, However it is not clear from reply what benefit those suppliers were gaining out of this paper transaction. If the payment was required to be made only for crude oil, then what was necessity to show it in first transactions and deduct in second one. I find the assessee s reply is not explaining the rationale behind such transaction. Such book adjustment is not allowed in accounting standard and even otherwise ethically not correct. 11. The adjudicating authority erred in stating that, it is not clear what benefit those suppliers were gaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that why crude oil was being sold in the name of refined oil and what was rationale behind such wrong declaration and that how debit note raised by appellant is only accounting entry. 13. The adjudicating authority is totally wrong in stating that no explanation is forthcoming as to why crude oil was being sold in the name of refined oil. M/s Mukund Oil have categorically stated that if the crude oil is sold, they are not entitled for set off and therefore, bill for refined oil is raised though crude oil is sold. Obliviously the debit note raised by the appellant is only for accounting entry as they are required to pay only for crude oil and the appellant is bound to raise debit note for difference between price of crude oil and refined oil. M/s Mukund Oil have thrown complete light on the transaction but the adjudicating authority have not accepted the same on the above incorrect ground. 14. From what has been discussed in para 7 to 13, I hold that the appellant have not recovered any amount from the crude oil suppliers representing excise duty. The debit notes raised, showing excise duty also, are only for reducing bill amount of refined oil to the level of cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of crude oil, used to issue invoice for refined oil. The price of refined oil consisted the value of crude oil plus processing charges for converting from crude oil to refined oil. Further the Commissioner (Appeal) concluded that this adjustment has got nothing to do with Central Excise duty. The Commissioner (Appeals) findings and observations amounts to travelling beyond the scope of show-cause notice and the Order-in-Original. The show-cause notice is limited to the fact as to whether some amount has been recovered by the assessee in the name of Excise duty and not paid to the Department. The bills issued by the assessee clearly show that they are showing Rs. one per KG as Excise duty and such amounts have been recovered by them. The Commissioner (Appeals) have erred in accepting the contention of assessee that there is no recovery of any amount, which is contrary to records as maintained by the assessee. Further the Commissioner (Appeals) have erred in accepting this explanation of the assessee and not accepting the records which clearly evidence recovery in the name of Excise duty. Further the Commissioner (Appeals) erred in holding that the raw material supplier are seller ..... X X X X Extracts X X X X X X X X Extracts X X X X
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