Full Judgment
2. The relevant fact that arise for consideration are appellant availed modvat credit on the Furnace oil purchased by them during the period May 1999 to October 1999 from Indian Oil Corporation. Appellants purchased this Furnace oil from the Namkum Depot, Ranchi of the Indian Oil Corporation. The invoices issued by Namkum Depot, Ranchi of Indian Oil Corporation indicated the excise duty @ 16% and collected the same from the appellant. Show cause notice was issued to the appellant for denial of the modvat credit of excess excise duty of 1% as during the relevant period the refinery paid excise duty @ 15%. The appellants resisted the show cause notice on the ground that the amount of the excise duty as indicated on the invoice was the correct and they have paid the total amount to the Indian Oil Corporation. Adjudicating authority did not accept the contentions of the appellant and confirmed the demand and imposed penalty. On an appeal, Commissioner (Appeals) also concurred of the findings of the adjudicating authority and upheld the order in original.
3. Learned advocate appearing on behalf of the appellant submits that the invoices of the depot of Indian Oil Corporation indicates an excise duty @ 16%. It is his submission that subsequently, the Indian Oil Corporation on their own have paid the total amount of duty as calculated payable from the duty paying document for the period 2/2/2000 and 14/6/2000 and issued the certificate to that effect. This would indicate the entire amount of the duty liability arising out of the short payment has been already discharged by the Indian Oil Corporation to the Government. If that is correct, and then the denial of modvat credit to appellant is unwarranted. It is also submitted that the such payment of the duty by the Indian Oil Corporation Refinery has been certified by the Superintendent of Central Excise having jurisdiction over the such refinery.
4. Learned DR on the other hand reiterates of the findings of the learned Commissioner (Appeals). It is the submission that the appellant have availed the modvat credit on that part of duty which was not paid by the Indian Oil Corporation at the time of clearance of goods. It is his submission if the amount of duty is not paid by the refinery, the appellant cannot avail the modvat credit.
5. Considered the submissions made at length by both sides and perused records. On perusal of the records, it is seen that the invoices issued by the Namkum Depot of the Indian Oil Corporation indicates that the excise duty is discharged @ 16%. It is undisputed that the appellant had paid the amount of invoice value to the Indian Oil Corporation which indicated as excise duty payment of 16%. It is now settled law that when an amount of excise duty as indicated in the invoice is paid by the appellant to the supplier of the goods, the credit of that amount cannot be denied for the reason that the original supplier has not discharged the duty liability. Furthermore, in this case the demand of the duty from the appellant is for the clearances made by the Namkum Depot of Indian Oil Corporation, which evident the annexure to the show cause notice. I find from the records that Indian Oil Corporation, had specifically issued a certificate which reads as under: This is to certify that we have debited an amount of Rs. 944342.00 (Rupees Nine Lakh Forty four thousand Three hundred forty two only) in PLA on 9th February 2000 under the heading "Adventitious gain on FO during April'99 to June'99" being the differential duty payable on the Furnace Oil falling under S.H. 2710.90 cleared by us during April'99 to June'99 as per enclosed audited statement. Out of the said amount Rs. 327704.00 was paid for Namkum, Rs. 430301.00 for Balasore & Rs. 186337.00 for Sambalpur.
The reason for payment of differential duty in brief is that there was an adventitious gain on account of subsequent upward revision in the assessable value of Furnace Oil.
NAME & ADDRESS: INDIAN OIL CORPORATION LTD. OF ASSESSEE HALDIA REFINERY Certified that the above particulars have been verified and they are correct. Worksheet attached to the certificate is also signed.
6. Still not satisfied with the above certificate, the appellants approach Indian Oil Corporation, the Marketing Division asking them further clarification by giving details of the invoices issued by Namkum depot. In response to such letter of the appellant, Indian Oil Corporation vide letter dated 21/06/2001 replied as under: With reference to personal discussion of the undersigned with you regarding modvat challans, we want to inform you that we have paid differential duty on FO uplifted by you from Namkum Depot for the period from 18.5.99 to 22.1.2000 as per your annexures enclosed with the letter. We are enclosing Certificate-A for the payment of differential duty during the period.
We have also paid differential duty on Lubricant/Grease uplifted from our depot for the period from 17.2.2000 to 18.10.2000 by PLA Entry No. 68 dt. 12.3.2001 at our IOBL Plant at Kolkata.
We trust that the above information will fulfill your excise requirement.
7. It can be noticed from above two reproduced letters and 57E Certificate issued by the Indian Oil Corporation and duly attested by the Central Excise officers, that the liability of differential duty was discharged by Indian Oil Corporation on their own, to the revenue.
If that be so, to my mind, the appellants cannot be denied the modvat credit of the amount of the excise duty paid by the supplier of the goods.
8. Accordingly, in view of the facts and circumstances of the case, the impugned order is liable to be set aside and I do so. Appeal allowed with consequential relief, if any.