MALIK MUHAMMAD QAYYUM, J.---The appellant which is a Company incorporated under the Companies Ordinance, 1984, is engaged in the distribution of supply of natural gas to various consumers, domestic, commercial and industrial.
2. It has been explained by the learned counsel for the petitioner that gas is supplied to the consumers under an agreement between the parties which provides that if the bill is not paid within a specified period, the appellant would be entitled to surcharge. The respondent which is a functionary under the Central Excises Act, 1944, has started raising a demand that the excise duty be paid by the appellant on the whole of the charges received including the amount of surcharge on late payment.
3. Mr. Aftab Ahmad Khan, learned counsel for the appellant has explained that the appellant has to purchase gas from well-head operators and Oil and Gas Development Corporation under agreements between the appellant and suppliers, which specifically state that if the payment was not made within time, the mark-up shall be paid by the appellant to the supplier. Consequently, the appellant was entitled to surcharge at the rate of 10%. In the submission of the learned counsel since by charging surcharge, no exciseable service is provided by the appellant, it had no liability to discharge in that respect.
4. The question which falls for determination in the present case is as to whether excise duty is payable on the surcharge levied on account of late payment of the bill by the consumers. All the three Authorities below, namely, Additional Collector, Collector of Appeals and the Customs Central Excise and Sales Tax Appellate Tribunal have found this question against the appellant.
5. Having heard the learned counsel for the parties at length and gone through the relevant law, we are of the view that the orders under appeal are well based and called for no interference.
Admittedly, the appellant is rendering exciseable services to its consumers and the surcharge is being added for ensuring payments within time. Surcharge is nothing but an added A surcharge, according to the Black's Law Dictionary, Sixth Edition page 1441.
6. Section 4(3)(b) of the Central Excises Act, 1944 specifically provides for levy on the basis of total amount received by the person. According to rule 96(ZZO) of the Central Excise Rules, 1944, excise duty is payable on the total bill sent by the appellant to its consumers. The word "total" is not without significance. It widens the scope of the word "bill" and all sorts of charges are included therein.
7. The learned counsel for the appellant has relied upon a circular issued by the Central Board of Revenue, according to which, no excise duty was payable on the surcharge. It has, however, been rightly, pointed out by the learned counsel for the respondent that in matters of adjudication, no instructions can be issued by the Central Board of Revenue and those instructions have no binding effect on the Adjudication Authorities. It is so provided in section 4(3)(b) of the Central Excises Act, 1944. No illegality or irregularity has been pointed out in the impugned orders. For the foregoing reasons, this appeal is dismissed.