Gauhati High Court dismisses excise claim plea against Indian Oil

Gauhati High Court dismisses excise claim plea against Indian Oil

The Court held that the dispute on the rate of duty would lie before Supreme Court u/S 35L of Central Excise Act

The Gauhati High Court dismissed an appeal on the preliminary ground that a dispute on the rate of duty would lie before the Supreme Court u/S. 35L of the Central Excise Act, 1944.

A Division Bench of the High Court of Gauhati, comprising Chief Justice Sudhanshu Dhulia and Justice Manash Ranjan Pathak, dealt with the matter titled Commissioner of Central Excise and Service Tax v Indian Oil Corporation Limited.

The Court did not go into the factual matrix of the appeal as the matter was dismissed on the preliminary objection. The core issue was regarding the rate of duty liable to be paid by the Respondent – Assessee for which the appeal was filed by the Appellant – Commissioner of Central Excise and Service Tax. The Appellant submitted that the Respondent – Assessee had paid an excise duty only on Superior Kerosene Oil (SKO) without paying the duty on Motor Spirit (MS) and High-Speed Diesel (HSD). It was contended by the Appellant that the Superior Kerosene Oil (SKO) was mixed with Motor Spirit (MS) or High-Speed Diesel (HSD), and therefore, the Respondent – Assessee would be liable to pay the duty, which was applicable on Motor Spirit and High-Speed Diesel, as stipulated in the Circular dated 22 April 2002.

However, a preliminary objection was raised by the Respondent – Assessee regarding the maintainability of the appeal. The Respondent – Assessee contended that in case the dispute related to the rate of duty for the purposes of assessment, then an appeal would lie before the Supreme Court u/S 35L of the Central Excise Act, 1944.

The Court noted that that dispute fell in a very limited area as to the determination of the rate of duty to be paid by the Respondent – Assessee, which was within the exclusive jurisdiction of the Supreme Court u/S 35L of the Act.

The appeal was, therefore, dismissed on the ground that it could not be heard by the High Court u/S 35G of the Act by observing the following:

"Whichever way we look at this dispute, what goes to the root of the present dispute is as to at what rate the duty was liable to be paid by the assessee, i.e. whether it was a duty liable to be paid on SKO or on MS and HSD. That is the core issue. Sub-Section (1) of Section 35G states that an appeal will not lie before the High Court but before the Supreme Court if "among other things" the matter relates to the rate of duty of excise. Therefore, even if one of the many issues related to the rate of duty, the appeal would still lie before the Hon'ble Apex Court and not before the High Court."