Excise Duty Hike Notification Not Published In Gazette When Goods Cleared: CESTAT Rejects Revenue’s Demand on BPCL [Read Order]

The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has granted relief to Bharat Petroleum Corporation Limited (BPCL), holding that the excise duty hike notifications issued by the Central Government under the Notifications No. 22/2014-CE and 24/2014-CE, dated 12 November 2014 and 2 December 2014 were not enforceable on the dates of their issue because they were not published in the Gazette nor made available to the public when BPCL cleared its petroleum products.

BPCL cleared its goods from its Mumbai and Kochi refineries during business hours on the dates mentioned above, charging excise duty at the pre-revised rates. Later that same day, the Central Government issued notifications enhancing the excise duty.

However, these notifications were uploaded or made publicly accessible only late in the evening and were not published in the official Gazette on those dates. BPCL subsequently deposited the differential duty of ₹397.42 lakh for Mumbai and ₹265.35 lakh for Kochi, amounting to a total of ₹6.62 crore, strictly under protest.

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The appellant contended that the enhanced excise duty notifications relied upon by the Revenue were legally ineffective on the dates of clearance since the statutory conditions under Section 5A(5) of the Central Excise Act were not fulfilled.

The Company argued that a notification altering duty rates becomes operational only when it is not only issued but also simultaneously published in the Gazette and made available to the public, requirements admittedly not satisfied since the refinery cleared the goods hours before the notifications were accessible.

It was thus contended by BPCL that it could not be compelled to apply a duty structure that was not yet in the public domain.

The appellant further submitted that the differential duty deposited later in the day was done under protest, solely to avoid litigation and penal proceedings.

Importantly, the corporation demonstrated through its invoices that customers were billed strictly at pre-revised duty rates, thereby proving that the incidence of the enhanced duty was not passed on, and eliminating the possibility of unjust enrichment which is an essential prerequisite for refunds.

The Revenue, however, took the position that the notifications became effective the moment they were issued, irrespective of the timing of their publication or public availability. On this basis, the Department claimed that BPCL was legally obligated to pay the higher duty for all clearances made on the same date and therefore was not entitled to the refund sought.

CESTAT rejected the Revenue’s stand, noting that the notifications were neither published in the Gazette nor made publicly accessible on the dates of their issue. Relying on Supreme Court judgments, including Param Industries and G.S. Chatha Rice Mills, the Tribunal held that any duty-altering notification is enforceable only upon actual public availability, not mere issuance.

The Bench comprising Justice Ajay Sharma[Judicial Member] and Mr P. Dinesha [Technical Member] held that BPCL had correctly demonstrated that it did not pass on the enhanced duty to buyers, entitling it to a refund under Section 11B. Consequently, the Tribunal set aside the impugned orders and directed that BPCL’s refund claims be allowed in full.

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