2016 (2) TMI 1046 - AT - Central Excise

Tribunal rules in favor of appellant, dismissing Central Excise duty demand.

The Tribunal set aside the impugned order, ruling in favor of the appellant in a case concerning the recovery of differential Central Excise duty for ... Liability to pay amounts collected as representing excise duty under Section 11D - burden of proof on the Revenue to establish that amounts collected represented excise duty - cenvatable sales invoice reflecting duty paid on procurement from refinery - invocation of Section 11D requires evidence that collections were treated and represented as dutyLiability to pay amounts collected as representing excise duty under Section 11D - burden of proof on the Revenue to establish that amounts collected represented excise duty - Whether the proviso to Section 11D could be invoked to recover differential central excise duty from the appellant for sales of ATF at revised higher prices - HELD THAT: - The Tribunal examined sample invoices which showed that the duty actually paid at the time of clearance from the refinery was claimed in the cenvatable sales invoices issued by the appellant to airline customers despite upward revision in sale price. Section 11D mandates payment to the Government of any amount collected from the buyer as representing duty, but the Department must bring evidence that the amount collected by the assessee in fact represented excise duty. The Revenue produced no documentary evidence before the adjudicating authority to demonstrate that the appellant had collected amounts representing duty over and above the duty paid at the refinery. In absence of such evidence the statutory requirement to establish that collections were treated as duty was not satisfied and Section 11D could not be invoked merely on presumption. [Paras 5, 6, 7]Findings of demand and penalty under Section 11A/11D set aside; appeal allowed.Final Conclusion: The Tribunal held that, on the material before it, the Department failed to discharge the burden of proving that the appellant had collected amounts representing excise duty on ATF sales; consequently the demand and penalty under the impugned order were set aside and the appeal was allowed. Issues:Recovery of differential Central Excise duty under Section 11A of the Central Excise Act, 1994 read with Section 11D ibid for selling ATF at higher prices.Analysis:The case involved the appellant engaged in procuring, warehousing, and clearing duty paid petroleum products, including Aviation Turbine Fuel (ATF). The Oil Co-ordination Committee (OCC) fixed prices of petroleum products under the Administered Price Mechanism (APM) and revised the price of ATF from time to time. The appellant sold ATF at higher prices than the refinery's price during September 2004 to November 2008. Central Excise officers observed that the appellant collected excess amounts as Central Excise duty but did not remit it to the Central Government. Show cause proceedings were initiated, resulting in a demand for Central Excise duty, interest, and a penalty. The appellant appealed against the order.The appellant argued that they charged sales prices prevalent on the sale day in the invoices to airline customers and only claimed the actual duty paid on the pre-revised price during procurement. They contended that no excess amount over the Central Excise duty paid initially was collected from customers, making the demand unsustainable. The Revenue, on the other hand, supported the findings in the impugned order, stating that the appellant failed to provide documentary evidence to prove they did not collect excess Central Excise duty from customers.The Tribunal examined Section 11D of the Central Excise Act, which mandates paying any amount collected in excess of the assessed duty to the Central Government. The appellant demonstrated through sample invoices that they only claimed the duty paid on the pre-revised price from customers. The Tribunal noted that no excess Central Excise duty was collected by the appellant, making the Section 11D provisions inapplicable. The Revenue failed to provide evidence that the amounts collected represented excise duty, leading to the charges being based on mere presumption without credible evidence.Consequently, the Tribunal found no merit in the impugned order, setting it aside, and allowed the appeal in favor of the appellant. The charges for recovering Central Excise Duty based on presumption without substantial evidence were deemed unsustainable.