CESTAT Sets aside Penalty imposed on IOCL, Excise duty Evasion cannot be Alleged against a PSU [Read Order]
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.
![CESTAT Sets aside Penalty imposed on IOCL, Excise duty Evasion cannot be Alleged against a PSU [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Indian-Oil-Corporation-Limited.jpg "CESTAT Sets aside Penalty imposed on IOCL, Excise duty Evasion cannot be Alleged against a PSU [Read Order]")
According to a ruling by the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Indian Oil Corporation Ltd. (IOCL) is a Public Sector Undertaking (PSU) and cannot be accused of having the purpose to evade paying taxes. Read More: MS Dhoni Back as Captain: Is He Still Leading Off the Field as a Top Income Taxpayer? Between February 2009 and March 2012,...
According to a ruling by the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Indian Oil Corporation Ltd. (IOCL) is a Public Sector Undertaking (PSU) and cannot be accused of having the purpose to evade paying taxes.
Read More: MS Dhoni Back as Captain: Is He Still Leading Off the Field as a Top Income Taxpayer?
Between February 2009 and March 2012, the appellants, M/s Indian Oil Corporation Ltd., Panipat, obtained an exemption clearance for Superior Kerosene Oil (SKO) under the Public Distribution System (PDS) in order to deliver SKO through their Guwahati plant.
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The appellants did see, nonetheless, that a portion of the SKO approved was being used for purposes other than those for which it was designed. Prior to the show-cause notice being issued, the appellants paid the relevant difference Central Excise Duty and interest on their own.
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.
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The two member 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 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.
To Read the full text of the Order CLICK HERE
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