ORDER
J.H. Joglekar, Member (T)
1. An application has been filed for taking on record certain documents. The first document is the reply to the show cause notice which was inadvertently not placed on record earlier. The second is two affidavits filed by two officers of the appellant company. Shri Setalwad, learned senior counsel, clarified that the averments made in the affidavits were made before the respective authority during the earlier proceedings. The D R does not have serious objection. Application granted. Documents taken on record.
2. When these stay applications were called out, Shri J.M. George, JDR, stated that the Revenue wanted to engage a senior counsel and requested for an adjournment. We find that there is a letter on record dated 10.11.2000 from the office of the Commissioner of Customs, Pune to that effect. We also find that thereafter on 12.12.2000 the bench had heard this matter and had directed the stay applications to be posted today, i.e. 12.2.2001, after hearing the prayer that the Revenue wanted to engage a senior counsel. We feel that during the last two months the Revenue had sufficient time to engage the senior counsel. Shri George states that in terms of the Commissioner’s letter dated 9.2.2001 received by him, the proposal is pending with the Board. We do not think that our disposal should be governed by the speed at which the Board operates. We therefore proceed to hear both sides on the stay applications.
3. Shri A. Setalwad, senior counsel, appeared along with Shri D.B. Shroff, advocate for the applicants. Revenue was represented by Shri J.M. George.
4. In the impugned order customs duty of Rs.23,42,81,517/- has been confirmed under the Customs Act, 1962.
5. We find that the fact that this sum stood paid by the assessees as come out in paragraph 33 of the annexure to the show cause notice. The second confirmed demand is of Rs.6,81,13,416/- under the Customs Act. Before examining this demand it is necessary to illustrate the manner in which the clearances are made and the duties are paid.
6. The appellant company receives indigenously manufactured petroleum products as well as imported petroleum products through the common pipeline. These products are stored in the same tanks, product-wise, irrespective of their origin. The clearances are made from these tanks. Part of the products is cleared on payment of Customs duty on filing of ex-bond bills of entry. Part of the goods is cleared on payment of Central Excise duty on receipt of non duty paid PDA invoices. The quantities cleared in these two ways are related to the receipt of the non-duty paid quantities of imported goods and indigenously produced goods. It appears that the assessee appellants paid duty amounting to Rs.1.66 crores under the presumption that the goods cleared were indigenously produced. The Commissioner held that these were imported goods on which the total burden of duty was higher and that it came to Rs.6,81,13,418/-. This is the duty confirmed in part B of the order. The assessees have paid an additional amount of Rs.5.15 crores. The annexure referred to above acknowledges this payment vide para 4.12 thereof. It could be said that the short-fall of Rs.1.60 crores is payable as Customs duty and the Excise duty wrongly paid is capable of being refunded. But for the purpose of hearing of the stay application, we note that the required amount has been received by the Revenue although the labels put thereto may be different.
7. The third part of demand is of Rs.8,81,87,937/-. This demand is made “under section 28B of the Customs Act, 1962 read with section 11D of the Central Excise Act, 1944”. Although neither side could throw light on the actual provision under which the demand was confirmed, the genesis appears to be as follows –In spite of the source of the product, the goods are sold at the prices determined under the administered prices scheme which is decided from time to time by a committee appointed by the Ministry. It appears that on the sale bills the duty collected is shown as the Central Excise duty. A comparison was made by the investigators of the valuation of the imported goods and of indigenously produced goods (paragraph 5.2 of the annexure to the show cause notice). It appeared that the CVD paid on the goods imported was less than the duty collected from the buyers. This duty is sought to be collected under this paragraph.
8. This issue was discussed at length. The two provisions cited above are independent and mutually exclusive provisions. The Commissioner’s action of using both powers at the same time to confirm the same amount has created some difficulties in appreciation. The countervailing duty may not be termed as “duty of Excise” in terms of section 11D of the Cental Excise Act. On the other hand the duty of Excise collected may not subject itself to the coverage of section 28B of the Customs Act. At this stage, we feel it appropriate to waive the condition of pre-deposit of this quantum of duty.
9. As regards the penalties, we observe that the entire issue would appear to have arisen on account of the manner of fixation of prices which is beyond the purview of the present appellant company. When we hear the case finally, the aspect whether the appellant company had done certain actions which rendered them liable to penalty would become apparent, the same would be the situation of the four officers of the company, who are the other applicants before us today.
10. We find that very significant sums are involved in the proceedings, even after the payment of significant sums by the appellant company. The issues involved are also of considerable importance. The citation of the South Regional Bench’s judgment in the case of same appellants (Final order no. 1710-1745/2000 dated 30.11.2000) is not of much guidance to us. We therefore deem it proper to post the appeals for final hearing out of turn on 2nd and 3rd May, 2001. We have given a longer date so that the Revenue can appoint the senior counsel and have time to brief him properly.
11. On these dates we shall hear the five appeals. The requirement of pre-deposit Rs.8,81,87,937/- and the penalties imposed upon the five applicants are waived and stay recovery thereof is stayed during the pendency of the present appeals.