M/S HINDUSTAN PETROLEUM CORPORATION LTD. versus THE COLLECTOR OF CENTRAL EXCISE

Citation: [1995] 3 S.C.R. 839 · Decided: 27-04-1995 · Supreme Court of India · Bench: R.M. SAHAI · Disposal: Dismissed

Judgment (excerpt)

MIS HINDUSTAN PETROLEUM CORPORATION LTD. 
A 
v. 
THE COLLECTOR OF CENTRAL EXCISE 
APRIL 27, 1995 
(R.M. SAHA! AND S.B. MAJMUDAR, JJ.] 
B 
Central Excises and Salt Act, 194~Section 35(a)-Central Excise 
Rules-Rules 12 and 13-lnterpretation-f'ayment of excise duty on goods 
exported outside lndi,,..-Rules. 12 & 13 are complementary to each 
other-<Joods exported from bonded warehouse under a bond-Liability to C 
pay duty-Claim of total exemption-Disallowed. 
The appellants filed a refund claim for a sum ofRs.18,859.50 P being 
the duty paid by them on Ugbt Diesel Oil supplied as Ship's stores for 
foreign going ships. The Diesel oil so supplied was ~barged to basic excise 
-duty, that is, the duty payable under the First Schedule to the Central D 
Excises and Salt Act read with any notification in force. The refund claim 
was made with respect to Rule 13 of the Central Excise Rules on the basis 
that no duty whatsoever was payable in respect of.LDO and Fumace Oil 
supplied from bonded stock as ship's stores going to foreign countries in 
~~~u 
E 
The Assistant Collector rejected the claim holding that In the light 
ofvarious notifications issued In connection with Rule 12 in respect ofsuch 
supplies, additional excise excise duty was payable at the concessional 
rates in terms of Notification. No. 232/67 dated 9.10.1967. On appeal, the 
Appellate Collector tumed down the claim of the appellants that the case F 
was govemed by Rules 13 without reference to Rule 12. The appellant's 
claim for refund in connection with the fumace oil also was rejected The 
appellants moved further appeals which were dismissed These appeals 
had been filed against the decision or the Tribunal. 
The appellants contended that they were not liable to pay excise duty G 
on goods which were exported outside India from a warehouse or 
registered factory; that as per Rule 13 of the rules such export could be 
made without payment of duty on the goods directly exported from bonded 
warehouse or registered factory; that Rule 13 is independOOt of Rule U 
which deals with only rebate or duty on excise duty paid goods which are H 
839 
840 
SUPREME COURT REPORTS 
[1995) 3 S.C.R. 
A subsequently exported outside India; that, therefore, the duty paid under 
protest by the appellants was liable to be refunded. The respondent con-
tended that the Tribunal was justified in rejecting all these claims of the 
appellants. 
The question raised for consideration was whether the appellant who 
B exported the concerned excisable goods as ship's stores for consumption 
on board vessels bound for any foreign ports had to pay on these goods 
excise duty as per Rule 13 or Rule 12. 
c 
Dismissing the appeals, this Court 
HELD : 1.1. Rules 12 and 13 of the Central Excise Rules deal with 
excisable goods which are exported from the country of their manufacture 
to outside countries. If the excisable goods are exported after payment of 
duty they may earn refund as per notification laid down by Rule 12. While 
D if these excisable goods are found in bonded warehouse covered by bond 
to pay excisable duty payable thereon, in case they are exported as laid 
down by Rule 13 they may earn exemption from payment of duty in the 
same manner as laid down by Rule 12. Therefore, both these rules are 
complementary to each other and cover the same topic of payment of 
appropriate excise duty on excisable goods which are exported outside 
E India. In case of Rule 12 the duty is to be paid first and on satisfying the 
condition of notification and proof of export appropriate refund can be 
earned in the light •f the notification. While in case of Rule 13 no duty 
shall be paid in the first instance and on proof of export as laid down by 
Rule 13 the respondents could not demand any· duty on those goods, in 
F excess of what was permissible. But if the proof of export is not available 
as required by Rule 13, full duty will have to be paid on these goods. 
However, so far as liability to pay excise duty under Rule 13 is concerned, 
it will have to b"linked up with Rule 12, because that rule deals with rebate 
of duty paid on excisable goods manufactured in India which have ul-
timately been exported outside India. Even for applicability of Rule 13 the 
G excisable goods stored in the bonded warehouse have to be exported in the 
like manner under similar circumstances as mentioned in Rule 12 which 
I 
is im!Ilediately preceding rule 13 and which deals with similar special 
.\· 
conces

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