M/S. Hindustan Petroleum Corporation ... vs C.C.E. Panchkula

[Arising out of Order-in-Original No.04/Commr/PKL/2008-09 dated 29.08.2008 by the Commissioner of Central Excise (Appeals), Panchkula].

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Hindustan Petroleum Corporation Ltd. .Appellants

Vs.

C.C.E. Panchkula .Respondent

Appearance:

Shri H. Bajaj, Advocate for the Appellants

Shri A.K. Dhawan, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 19.01.2015

FINAL ORDER NO.50180/2015-EX(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order for demanding the duties on shortage and excesses which were found during the course of the investigation.

2. The facts of the case are that the appellant is a bonded warehouse with M/s Hindustan Petroleum Corporation Ltd. Duties on the goods have been paid at the time of clearance from refineries and goods were stocked in the warehouse. The appellant is measuring the stock through dip method and selling the goods to various customers. Audit took place at the factory of the appellant and it was found that appellant has adjusted various shortages and excesses on the stock on daily basis from the clearance. Therefore, for the period December 1994-March 1999, a show cause notice dated 30.12.1999 was issued to the appellant to demand duty. This excesses and shortages were found on daily basis on the clearance of the goods. Demand was confirmed by the adjudication order. Appellant appeared before this Tribunal and this tribunal remanded the matter back to the adjudicating authority for fresh decision by the adjudicating authority. In remand proceedings, also the demands have been confirmed. Aggrieved from the said order appellant is before me.

3. The Ld. Counsel for the appellant submits that appellant is a public sector undertaking and demand has been confirmed by invoking extended period of limitation. Therefore, demands are not sustainable as held by this Tribunal in the case of C.C.E. Indore Vs. Nepa Ltd. 2013 (298) ELT 225 (Tri-Del).

4. On merits, he submits that appellant is not a manufacturer or the producer of the goods. Therefore, duty cannot be demanded from them. If at all any duty is demanded on shortages and excesses of the goods found at the premises of the appellant, the duty is to be demanded from refineries who are manufacturer of the impugned goods. Therefore, as held by the apex court in the case of C.C.E. Meerut Vs. Bharat Petroleum Corporation Ltd. reported in 2011 (272) E.L.T. 654 (SC) demand is not sustainable. In these circumstances, it is submitted that impugned order is to be set aside.

5. On the other hand Ld. AR opposes the contention of the ld. Counsel and submits that during the course of investigation certain shortages and excesses were found on daily basis on the clearance of the goods and appellant is adjusting duty demand towards them. Whatever shortage of goods is found on the premises of appellant, appellant is required to pay duty. He further submits that as these shortages and excesses have been revealed during the course of the investigation which was not informed by the appellant to the authorities, therefore, extended period of limitation is rightly invoked.

6. Heard the parties considered the submissions.

7. It is well settled principle that duty is to be demanded by the manufacturer / producer of the goods. Admittedly in this case appellant is not the manufacturer of the goods and is only a registered dealer and it is not the allegation that appellant has procured the goods clandestinely without payment of duty. In these circumstances, as held by this tribunal in the case of Bharat Petroleum Corporation Ltd (Supra), duty cannot be demanded from the appellant as they are not the manufacturer or producer of the goods.

8. In these circumstances, impugned order is not sustainable in the eyes of law and same is set aside. Appeal is allowed with consequential relief if any.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

4

E/2506/2008-EX(SM)