Per V.K. Agrawal :

This appeal has been filed by M/s. Bharat Petroleum Corporation Ltd. against adjudication order No. 502/2001 dated 9.10.2001 under which the Commissioner confirmed the demand of Rs. 74,16,207/- recovered by the appellants in excess from their customers representing duty of excise under Section 11D (2) of the Central Excise Act. A penalty of Rs. 5 lakhs has also been imposed on the appellants under the impugned order.

2. Shri A.R. Madhav Rao, ld. Advocate, submitted that when the petroleum products are cleared by the appellants from refinery or the installations Central Excise duty is paid on the assessable value prevailing at the depot at the time of removal of the goods; that the prices of the petroleum products are fixed under the Administered Price Mechanism (APM) by the Oil Coordination Committee (OCC) and accordingly, the duty paid stocks of HSD at their depot was sold at the revised prices by the appellants; that the demand has been confirmed and penalty has been imposed by the Commissioner on the ground that the appellants had collected the excess amount representing the duty of excise. The ld. Advocate further submitted that after amendment of Section 4 (4) (b) (iii) of the Central Excise Act, place of removal now includes depot, premises of a consignment agent or any other place from where excisable goods are to be sold after their clearance from the factory; that as per Section 4 (4) (ba) in respect of depot sales, time of removal shall be deemed to be the time at which the goods are cleared from the factory/warehouse i.e. even if goods are sold from depot at a later date, price prevalent at the depot at the time of removal of the factory would be the assessable value; that fluctuations in price subsequent to clearance of goods from the factory do not affect liability to pay excise duty as has been held by the Supreme Court in the case of MRF Ltd. Vs. CCE, Madras 1997 (20) RLT 656 (SC)=1997 (92) ELT 309 (SC). He also mentioned that Section 11D would be applicable only if an assessee collects any amount from the buyer as representing excise duty; that there is no such representation anywhere in the invoices issued by the appellants since they only issued a cash memo which does not contain any excise duty element in it; that the cash memo/invoice issued by the depot only mentions sale price and the Sales Tax; that the basic conditions for invoking Section 11D are absent in the present matter. He relied upon the decision in the case of CCE, Bhopal Vs. Perfect Refractories, 2001 (127) ELT 304 (T), wherein it was held that Section 11D stipulates that every person who has collected any amount from the buyer in any manner as representing duty of excise shall forthwith pay the amount so collected to the credit of the Central Government and as during the period of exemption the respondents therein was not liable to pay any excise duty, the Revenue's claim can only be treated as a mere presumption, lacking in any evidence to show that the surcharge was represented as duty of excise. He also relied upon the decision in the case of CCE, Mumbai Vs. Mahindra & Mahindra Ltd., 2001 (45) RLT 386=2001 (132) ELT 632.

3. Countering the arguments, Shri M.P. Singh, Ld. DR, submitted that the adjudicating authority has given a categorical finding in the impugned order that the appellants had pre-budget stock of HSD on which duty incidence was discharged at the lower rate and was sold through their depot at enhanced prices pursuant to increase in prices of the products by OCC subsequent to Union Budget 1999-2000; that in the said budget duty was increased on HSD w.e.f. 28.2.99 and the same was collected by the appellants by enhancing the prices; that as such increase in prices was clearly related to the increase in excise duty in the budget. He, further, submitted that the decision in the case of Mahindra & Mahindra is not applicable as the facts are totally different inasmuch as Mahindra & Mahindra were not held to be