Dealer's appeal allowed as Tribunal finds excise duty demand unsustainable under Section 11D. Order set aside.

The Tribunal concluded that the demand against the appellant, a dealer, for excise duty under Section 11D of the Central Excise Act, 1944, could not be sustained. The appeal was allowed, and the impugned order was set aside, providing consequential relief as per law.

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Issues Involved:

1. Liability of the appellant (dealer/depot) to pay excise duty under Section 11D of the Central Excise Act, 1944.
2. Applicability of the principle laid down in the case of M/s. HPCL Vs. CCE and other relevant case laws.
3. Interpretation of Section 11D of the Central Excise Act, 1944, before and after its amendment on 10.05.2008.

Summary:

1. Liability of the appellant (dealer/depot) to pay excise duty under Section 11D of the Central Excise Act, 1944:

The appellant, a registered dealer with warehouses/depots, collected an amount in excess of the duties paid on clearances of petroleum products during the period from July 1996 to September 2000. The central issue was whether the appellant, being a dealer and not a manufacturer, was liable to pay the excise duty under Section 11D of the Act. The adjudicating authority confirmed the demand, which was upheld by the Commissioner (Appeals). The appellant argued that the collected amounts were not credited to the Central Government, and the price of the petroleum products was determined under the administrated price mechanism (APM).

2. Applicability of the principle laid down in the case of M/s. HPCL Vs. CCE and other relevant case laws:

The appellant cited the Supreme Court's decision in Commissioner of Central Excise, Meerut Vs. Bharath Petroleum Corporation Ltd. [2011 (272) ELT 654 (SC)], which held that under Section 11D, as it stood prior to the amendment on 10.05.2008, the manufacturer was liable to pay the duty, and thus, the demand could not be raised against the depot. The Madras High Court in Commissioner of Central Excise, Coimbatore Vs. Hindustan Petroleum Corporation Ltd. [2015 (322) ELT 618 (Mad.)] also held that the demand could only be raised against the manufacturer before the amendment date.

3. Interpretation of Section 11D of the Central Excise Act, 1944, before and after its amendment on 10.05.2008:

The Tribunal considered whether the appellant, as a dealer, was liable under Section 11D. The Supreme Court in Bharath Petroleum Corporation Ltd.'s case clarified that the demand under Section 11D could not be raised against a dealer for the period before 10.05.2008. The Madhya Pradesh High Court in the appellant's own case also set aside the demand, holding that the duty demand on a registered dealer under Section 11D could not be sustained. The Madras High Court reiterated that the demand could be made under Section 11D prior to 10.05.2008 only from the manufacturer.

Conclusion:

After reviewing the facts and applying the relevant legal principles, the Tribunal concluded that the demand against the appellant could not be sustained. The impugned order was set aside, and the appeal was allowed with consequential relief as per law.

(Order pronounced in the open court on 17.07.2023)

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