The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Indian Oil Corporation Ltd (IOCL) is a Public Sector Undertaking (PSU) and intent to evade payment of duty, cannot be alleged.
The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that nothing has been brought on record to indicate any mens rea on the part of the appellants as the applicable duty as well as interest have been paid before issuance of the show cause notice. It has been held in a number of cases under identical circumstances, that penalty cannot be imposed.
The appellants, M/s Indian Oil Corporation Ltd, Panipat have cleared Superior Kerosene Oil (SKO), to their Guwahati unit during the period February 2009 to March, 2012, availing the exemption clearance of SKO under Public Distribution System (PDS) intended to supply under Public Distribution System.
However, the appellants noticed that a part of the SKO cleared was used for purposes other than it was intended. The appellants on their own have paid the applicable differential Central Excise Duty along with interest before the issuance of show cause notice.
In spite of the positive act, department issued a show cause notice dated 11.04.2013 proposing to appropriate the Central Excise Duty of Rs. 1,58,73,895 deposited by the appellants along with interest and proposing to impose penalty under Section 11AC of the Central Excise Act, 1944. The show cause notice was adjudicated.
The tribunal noted that being a Public Sector Undertaking wholly owned by the Government of India, they could not have evaded the duty and therefore a harsh penalty cannot be imposed.
Case Details
Case Title: Indian Oil Corporation Ltd Versus Commissioner of Central Goods & Service Tax, CGST, Panchkula
Case No.: Excise Appeal No. 51149 of 2014
Date: 24.03.2025
Counsel For Appellant: Krati Singh
Counsel For Respondent: Aneesh Dewan
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