In a major relief to the Hindustan Petroleum Corporation Ltd (HPCL), Bombay High Court held that Revenue cannot invoke extended periods of limitation for recovery of excise duty.
The respondent, Hindustan Petroleum Corporation Ltd has an Oil Terminal where they inter-alia received non-duty paid Superior Kerosene Oil (SKO) from their Mahul, Mumbai refinery and cleared the said product falling under Chapter 27 of the Central Excise Tariff on payment of duty to Public Distribution System (PDS) dealers and to other Oil Marketing Companies.
According to the appellant-revenue, the respondent had cleared SKO to Oil Marketing Companies and in respect of those clearances to the said Oil Marketing Companies, paid Central Excise Duty on value which is allegedly lesser than the transaction value, actually recovered by them from the other Oil Marketing Companies. The revenue accordingly called for the details from the respondent vide letter dated 8th September, 2005. The respondent furnished details of the transactions vide letter dated 21stSeptember, 2005. According to the revenue, the Central Excise Duty on an assessable value was much less than the transaction value actually recovered from the Oil Marketing Companies in contravention of the provisions of Section 4(1)(a) of the Central Excise Act, 1944.
In the facts of this case, order of Tribunal holding that the revenue could not have invoked the extended period of limitation for recovery of excise duty from the respondent-assessee purely based on the finding of facts inter-se and would not fall within the purview of public importance falling under Section 35L of the said Act. In this case, it is not the case of the respondent-assessee that the issue of limitation decided by the Tribunal would involve the question of any general/public importance.
The three judge bench of Justice R.D.Dhanuka, Justice Nitin B.Sambre and Justice Abhay Ahuja held that the issue of limitation raised in the Appeal has no direct or proximate relationship to the rate of duty and the value of goods for purposes of assessment. Only such questions which relate to the rate of duty and the value of goods for purposes of assessment would squarely fall within the meaning of the said expression ‘determination of any question having relationship to the rate of duty and to the value of goods for the purposes of assessment. Neither any question in that regard to determination of rate of duty nor any question relating the value of goods arise for determination of this appeal, as respondent-assessee has not impugned the order of the Tribunal confirming the demand raised in the show-cause notice for recovery of duty.
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