2020 (9) TMI 222 - AT - Central Excise

Tribunal exempts appellant from duty under Central Excise Act for Ethanol Blended Petrol

M/s Hindustan Petroleum Corporation Ltd. Versus Commissioner of Central Excise, Belapur….

M/s Hindustan Petroleum Corporation Ltd. Versus Commissioner of Central Excise, Belapur…. - TMI Issues Involved:1. Eligibility for exemption under Notification No. 28/2002-CE for clearance of Ethanol Blended Petrol (EBP) from Vashi Terminal.2. Requirement to deposit duty under Section 11D of the Central Excise Act, 1944.Detailed Analysis:Issue 1: Eligibility for Exemption under Notification No. 28/2002-CEThe appellant, a registered entity with the Central Excise Department, cleared Ethanol Blended Petrol (EBP) at a concessional rate of duty. The EBP consisted of 95% Motor Spirit (MS) and 5% ethanol by volume. The appellant claimed exemptions under various notifications, including Notification No. 28/2002 dated 13.5.2002, amended by subsequent notifications. The primary contention was whether the EBP conformed to Bureau of Indian Standards (BIS) specification 2796:2000, a prerequisite for availing the exemption.The appellant argued that the blending of ethanol with motor spirit was a simple process conducted during transit in tankers/trucks without mechanical or electrical appliances. They submitted test reports from their Vashi Terminal and later from their Mumbai Refinery, indicating that the EBP conformed to BIS specifications. Despite this, the Commissioner rejected these reports, deeming them an afterthought and lacking evidentiary value.The Tribunal found merit in the appellant's argument, noting that the appellant, a Public Sector Undertaking, conducted tests on EBP samples to ensure quality and compliance with BIS specifications. The Tribunal emphasized that the appellant's test reports should be accepted unless contrary evidence is provided by the Revenue. The Tribunal concluded that the appellant complied with the exemption notification conditions, confirming that the EBP conformed to BIS specification 2796:2000.Issue 2: Requirement to Deposit Duty under Section 11D of the Central Excise Act, 1944Section 11D mandates that any person who collects an amount representing duty of excise in excess of the duty assessed must deposit the excess amount with the Central Government. The Revenue alleged that the appellant collected duty from customers but did not deposit it with the government.The appellant contended that the invoices issued from the Vashi Terminal indicated a composite cum-duty price without showing the duty element separately. Therefore, Section 11D was not applicable. The Tribunal supported this view, referencing previous judgments that held Section 11D applies only when an amount is collected explicitly as representing duty of excise.The Tribunal distinguished the present case from a previous judgment involving Indian Oil Corporation Ltd. (IOCL), where the duty element was shown separately in invoices. In the current case, the composite price included duty, and no separate duty on ethanol was collected or shown in the invoices. Consequently, Section 11D was not applicable.Conclusion:The Tribunal set aside the impugned order, allowing the appeal with consequential relief as per law. The Tribunal confirmed that the appellant was entitled to the exemption under Notification No. 28/2002-CE and was not required to deposit duty under Section 11D of the Central Excise Act, 1944.