oil industries development act.pdf

7/27/2019 OIL INDUSTRIES DEVELOPMENT ACT.pdf

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THE OIL INDUSTRY(DEVELOPMENT)

ACT, 1974

(Act No. 47 of 1974)

GOVERNMENT OF INDIAMINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS


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THE OIL INDUSTRY (DEVELOPMENT) ACT, 1974ARRANGEMENT OF SECTIONS

CHAPTER IPRELIMINARY

SECTIONS1. Short title and extent.2. Definitions.

CHAPTER IITHE OIL INDUSTRY DEVELOPMENT BOARD

3. Establishment and constitution of the Board.4. Conditions of service of members.5. Secretary, officers, consultants and employees of the Board.6. Functions of the Board.7. Principles and conditions of assistance.8. Power to call for repayment before agreed period.9. Special provisions for enforcement of claims by the Board.10. Power of Board to appoint Directors of oil industrial concern.11. Effect of notified order appointing Director.12.powers and duties of the Directors.13. No right to compensation for loss of office.14.Application of Act 1 of 1956.

CHAPTER IIFINANCE, ACCOUNTS AND AUDIT

15. Duties of excise.16. Crediting of proceeds of duty to Consolidated Fund of India.17. Grants and loans by the Central Government.18. Oil Industry Development Fund.19. Power to borrow.20.Accounts and audit.

4'


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CHAPTER IVCONTROL BY THE CENTRAL GOVERNMENT

CLAUSES

21 .Power to require persons engaged in oil industry to maintain and producebooks, accounts and records relating to business and inspection thereof.

22. Directions by the Central Government.

CHAPTER VMISCELLANEOUS

23. Penalties.24. Other penalties.25. Offences by companies.26.Jurisdiction of courts.27. Previous sanction of the Central Government.28. Protection of action taken in good faith.29. Dissolution of the Board.3D.Act to have overriding effect.31 .Power to make rules.

THE SCHEDULE.


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THEOIL INDUSTRY(DEVELOPMENT)ACT, 1974(NO.47OF1974)

(26 September, 1974)

An Act to provide for the establishment of a Board for the development ofoil industry and for that purpose to levy a duty of excise on crude oil and naturalgas and for matters connected therewith.BE it enacted by Parliament in the Twenty-fifth Year of the Republic ofIndia as follows :-

Short title& extent 1.

Definitions 2.

CHAPTER IPRELIMINARY

(1) This Act may be(Development) Act, 1974;called Oilhe Industry

(2) It extends to the whole of India.In this Act, unless the context otherwise requires-(a) . "assistance"section 6;

undereans assistance rendered

(b) "Board" means the Oil Industry Development Boardestablished under section 3;(c)(d)

"Chairman" means the Chairman of the Board;"Court" means the High Court or the Court of JudicialCommissioner within the local limits of whosejurisdiction the defendant or respondent carries on thewhole or a substantial part of his business, and wherethe Central Government has, by notification in theOfficial Gazette, and subject to such restrictions,limitations and conditions, as it thinks fit, empoweredany court of civil jurisdiction subordinate to the HighCourt or, as the case may be, the Court of the JudicialCommissioner, to exercise all or any of the powersconferred by this Act, such court;

(e) "crude oil" means petroleum in its natural state beforeit is refined or otherwise treated but from which wate rand foreign substances have been extracted;


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(1) "fertilizers" means such oil based chemicalcompounds which when employed in agricultureprovide either single or multiple plant nutrients in anyone or more of the forms of nitrogen, phosphorus andpotash;

(g) "members" means a member of the Board andincludes the Chairman;

(h)(i)

"mineral oil" includes petroleum and natural gas;"Natural gas" means gas consisting primarily ofhydrocarbonsobtainedfromoil wellsor gaswells.

G) "oil industrial concern" means any company,corporation or co-operative society, which is engagedor which is to engage in any activity referred to inclause (k);(k) "oil industry" includes all activities by way ofprospecting or exploring for or production of mineraloil, refining, processing, transportation, storage,handling and marketing, of mineral oil production andmarketing of all products, down-stream of an oilrefinery and the production of fertilizers and petro-chemicals and all activities directly or indirectlyconnected therewith;(I) "petro-chemicals" means chemicals, whether organicor inorganic, derived from petroleum including crude

oil, natural gas, condensates, refined petroleumfractions and refinery gases;(m) "petroleum product" means any commodity madefrom petroleum or natural gas and includes refinedcrude oil, processed crude petroleum, residuum fromcrude petroleum cracking stock, uncracked fuel oil,fuel oil, treated crude oil residuum, casing headgasonline, natural gas gasoline, naphtha, distillategasoline, kerosene, bitumen, asphalt and tar, wasteoil, blended gasonline, lubricating oil, blends ormixture of oil with one or more liquid products or by

products derived from oil or gas and blends ormixtures of two or more liquid products or by-productsderived from oil condensate and gas or petroleumhydrocarbons not specified hereinbefore;(n) "prescribed" means prescribed by rules made underthisAct.


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Establishment&constitutionof the Board

CHAPTER IITHE OIL INDUSTRY DEVELOPMENT BOARD

3 (1) With effect from such date as the CentralGovernmentmay, by notificationin the Official Gazette,appoint inthis behalf, there shall be establishedfor the purposesof this Act a Board to be called the Oil IndustryDevelopmentBoard.

(2) The Board shall be a body corporate by the nameaforesaid having perpetual succession and a commonseal, with power to acquire, hold and dispose ofproperty, both movable and immovable, and tocontract, and shall by the said name sue and be sued.(3) The Board shall consist of the following members,namely:-(a) not more than three members to be appointed by theCentral Government to represent the Ministry or

.Ministries of the Central Government .tfealing withpetroleum and chemicals;

(b) two members to be appointed by the centralGovernment to represent the Ministry of the CentralGovernment dealing with finance;(c) not more than five members to be appointed by theCentral Government to represent the Corporations,

being Corporations owned or controlled by the CentralGovernment, engaged in activities referred to in clause(k) of section 2;(d) two members of who one shall be appointed by theCentral Government from amongst persons who, in theopinion of that Government, have special knowledge orexperience of oil industry and the other shall beappointed by that Government to represent labouremployed in the oil industry;(e) The Secretary to the Board, ex officio.(4) The Central Government shall appoint the Chairman ofthe Board.(5) The term of office of the members of the Board (otherthan the members appointed by virtue of office) and themanner of filling vacancies among, and the procedureto be followed in the discharge of their functions by, themembers shall be such as may be prescribed.


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Conditions ofservice ofmembers

Secretary,Officers,Consultants &Employees ofthe Board

(6) Subject to such conditions and restrictions as may beprescribed, the Board may constitute StandingCommittees or ad hoc Committees for exercising anypower or discharging any duty of the Board or forinquiring into, reporting and advising on, any matterwhich the Board may refer to them:Provided that a Standing Committee shall consistexclusively of members of the Board.

(7) No act or proceeding of the Board or of any Committeeconstituted under sub-section (6) shall be invalidatedmerely by reason of-(a) any vacancy in, or any defect in the constitution of, theBoard or such Committee; or(b) any defect in the appointment of a person acting as amember of the Board or such Committee; or(c) any irregularity in the procedure of the Board or suchCommittee not affecting the merits of the case.

4 Every person appointed as a whole-time member of theBoard shall be entitled to such salary and allowances andsuch conditions of service in respect of leave, pension,provident fund and other matters as may, from time to time,be fixed by the Central Government and the other membersof the Board and such of the members of any ad hocCommittee constituted under sub-section (6) of section (3)as are not members of the Board shall be entitled to suchallowances, if any, and such other conditions of service, asmay be prescribed.

5 (1) The Central Government shall appoint a Secretary tothe Board.(2) Subject to rules made in this behalf, the Secretary shallexercise such powers and perform such duties as maybe prescribed or as may be delegated to him by theBoard.(3) The Secretary shall be entitled to such salary andallowances and such conditions of service in respect ofleave, pension, provident fund and other matters asmay, from time to time, be fixed by the CentralGovernment.(4) Subject to such conditions and restrictions as may beprescribed, the Board may appoint such consultants as


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Functions ofthe Board

2 of 1934

may be necessaryfor the performanceof it functionson such terms and conditionsas it may determinefromtime to time.(5) Subject to such conditions and restrictions as may beprescribed, the Board may appoint such other officersand employees as may be necessary for the

performance of its functions and pay them suchsalaries and allowances as it may determine from timeto time.6 (1) Subject to the provisions of this Act and the rules madethereunder, the Board shall render, in such manner, tosuch extent and on such terms and conditions as it may

deem fit, financial and other assistance for thepromotion d all such measures 'as are, in its opinion,conducive to the development of oil industry.(2) Without prejudice to the generality of the provisions ofsuch-section (1), the Board may render assistanceunder that sub-section by-(a) making grants or advancing loans to any oil industrialconcern or other person who is engaged or is to

engage in any activity referred to in clause (k) ofsection 2;(b) guaranteeing on such terms and conditions as may beagreed upon loans raised by any oil industrial concernor other person which are repayable within a period not

exceeding twenty-five years and are floated in themarket or loans raised by an oil industrial concern orother person from any bank which is a scheduled bank,or a State co-operative bank, as defined in the ReserveBank of India Act, 1934;(c) guaranteeing on such terms and conditions as may beagreed upon deferred payments due from any oilindustrial concern or other person in connection withimport of capital goods from outside India or inconnection with purchase of capital goods fromoutside India or in connection with purchase of capital

goods within India by such concern or other person;(d) guaranteeing on such terms and conditions as may beagreed upon loans raised from, or credit arrangementsmade with, any bank or financial institution in anycountry outside India by any oil industrial concern orother person in foreign currency:

Provided that no such guarantee shall be given without


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the prior approval of the Central Government;(e) underwriting the issue of stock, shares, bonds, ordebenturesby any oil industrialconcern and retainingas part of its assets any stock, sharesc bonds ordebentures which it may have to take up in fulfillment ofits obligations thereto;(f) acting as agent for the Central Government or, with itsapproval, for any overseas financial organisation orcredit agency in the transaction of any business withany oil industrial concern in respect of loans oradvances gran-ted, or debentures subscribed by theCentral Government of such organisation or agency;(g) subscribing to the stock or shares of any oil industrialconcern;(h) subscribing to the debentures or any oil industrialconcern repayable within a period not exceedingtwenty-five years from the date on which they aresubscribed to:

Provided hat nothing contained in this clause shall bedeemed to preclude the Board from subscribing to thedebentures of any oil industrial concern, the amountsoutstanding thereon may be convertible at the option ofthe Board into stock or shares of that concern withinthe period the debentures are repayable.Explanation: In this clause, the expression "amountsoutstanding thereon" used in relation to any loan oradvance shall mean the principal, interest and othercharges payable on such loan or advance as at thetime when the amounts are sought to be converted intostock or shares.

(3) Without Prejudice to the generality of the provisions ofsub-section (1), the measures for the promotion ofwhich the board may render assistance under that sub-section may includemeasures for or byway of-(a) Prospecting for an exploration of mineral oil within India(including the continental shelf thereof) or outside India;(b) The establishment of facilities for production, handling,storage and transport of crude oil;(c) Refining and marketing of petroleum and petroleumproducts;


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Principles &conditions ofassistance

Power to callfor repaymentbefore agreedperiod

(d) The manufactureand marketingof petrochemicalsandfertilizers;(e) Scientific, technologicaland economic researchwhichcouldbe,directlyor indirectly,usefultooil industry;(f) Experimental or pilot studies in any field of oil industry;(g) Training of personnel, whether in India or outside,

engaged or to be engaged in any field of oil industry,and such other measures as may be prescribed.(4) The Board may charge such fees or receive suchcommission as it may deem appropriate for anyservicesrenderedby it intheexerciseof its functions.(5) The Board may transfer for consideration anyinstrument relating to loans or advances granted by it toany oil industrial concern or other person.(6) The Board may do all such things as may be incidentalto or consequential upon the discharge of its functionsunder this Act.

7 (1) Before rendering any assistance':' to any oil industrialconcern or other person, the Board shall have regard tosuch directions as the Central Government may issue inthis behalf and shall satisfy itself that -

(a) such assistance is not contrary to such directions; and(b) such assistance is necessary as a mater of priority inthe interests of the development of oil industry.(2) In rendering any assistance to any oil industrial concernor other person, the Board shall impose such conditionsas may be prescribed and may also impose suchadditional conditions as it may think necessary orexpedient for protecting the interests d the Board andfor securing that the assistance rendered by it is put tothe best use by such concern or other person.

8 Notwithstanding anything in any agreement to the contrary,the Board may, by notice in writing, require any oil industrialconcern or other person to which or to whom it has renderedany assistance to discharge forthwith in full its or hisliabilities to the Board -(a) if it appears to the Board that false or misleadinginformationin any materialparticularswas given in theapplicationfor suchassistance;or


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Specialprovisions forenforcementof claims bythe Board

4 of 1882

(b) if the concern or other personhas failed to complywiththe terms of its or his contractwith the Board in thematterof suchassistance;or(c) if there is a reasonable apprehension that the concernor other person is unable to pay its or his debts or that

proceedings for liquidation or in insolvency may becommenced in respect of such concern or person; or(d) if the property pledged, mortgaged, hypothecated orassigned to the Board as security is not insured andkept insured by the concern or other person to thesatisfaction of the Board; or depreciates in value to suchan extent that, in the opinion of the Board, furthersecurity to the satisfaction of the Board should be givenand suchsecurity is not given; or(e) if, without the permission of the Board, any machinery,plant or other equipment (whether or not forming part ofthe security), is removed from the premises of theconcern or other person without being replaced; or(f) if for any reason it is necessary to protect the interest ofthe Board.

9 (1) Where an oil industrial concern or other person, inbreach of any agreement, makes any default inrepayment of any loan or advance or any instalmentthereof or in meeting its or his obligations in relation toany other assistance rendered by the Board orotherwise fails to comply with the terms of theagreement with the Board or where the Board requiresan oil industrial concern or other person to makeimmediate repayment of any loan or advance and theconcern or other person fails to make such repayment,then, without prejudice to the provisions of section 69 ofthe Transfer of Property Act, 1882, any officer of theBoard generally or specially authorized by the Board inthis behalf may apply to the court for one or more of thefollowing relief, namely:-

(a) for an order for the sale of the property pledged,mortgaged, hypothecated or assigned to the Board assecurity for the loan or advance; or(b) for an ad interim injunctionwhere there is apprehensionof the machineryor the equipmentbeing removedfromthe premisesof the oil industrialconcernor other personwithoutthepermissionof theBoard;or


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the claim of the Board and the provisionsof the code ofCivil Procedure,1908 shall, so for as may be, apply tosuchproceedings.(9) On an investigation under made sub-section (8), thecourt shall pass an order-(a) Confirming the order of attachment and directing thesale of the attached property; or(b) Varying the order of attachment so as to release aportion of the property from attachment and directingthe sale of the remainder of the attached property; or(c) Releasing the property from attachment, if it is satisfiedthat it is not necessary in the interest of the Board; or(d) Confirming or dissolving the injunction; or(e) Transferring the management of the oil industrialconcern to the Board or rejecting the claim made in thisbehalf;

Provided that when making any order under clause (c), thecourt may make such other orders as it thinks necessary toprotect the interests of the Board, and may apportion thecosts of the proceeding in such manner as it thinks fit:Provided further that unless the Board intimates thecourt that it will not appeal against any order releasingany property from attachment, such order shall not begiven effect to until the expiry of the period fixed undersub-section (12) within which an appeal may bepreferred, or if an appeal is preferred, unless the courtempowered to hear appeals from the decisions of thesaid court otherwise directs, until the appeal isdisposed of.

5 of 1908 (10) An order of attachment or sale of property shall becarried into effect, as far as may be practicable, in themanner provided in the Code of Civil Procedure, 1908for the attachment or sale of property in execution of adecree, as if the Board were the decree-holder.

5 of 1958 (11) An order under this section transferring themanagement of an oil industrial concern to the Boardshall be carried into effect, as far as may be practicable,in the manner provided in the Code of Civil Procedure,1908 for the possession of immovable property or thedelivery of movable property in execution of a decree, asif the Board were the decree-holder.


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Power ofBoard toappointDirectors ofoil industriaiconcern

1 .of 1956Effect ofnotified orderappointingDirector

1 of 1956

(12) Any party aggrieved by an order under sub-section(7) or sub-section(9) may, within thirty days from thedate of the order, appeal to the courtempoweredto hearappeals from the decisions of the court which passedthe order and appellate court may after hearing thepartiespasssuchordersas it thinksproper.(13) Nothing in this section shall be construed, whereproceedings for liquidation or in insolvency in respect ofthe oil industrial concern or other person havecommenced before an application is made under sub-section (1) as giving to the Board any preference overthe other creditors of the concern or other person not

conferred on it by any other laws.(14) For the removal of doubts, it is hereby declared thatany court competent to grant an ad interim injunctionunder this section shall also have the power to appoint areceiver and to exercise all other powers incidentalthereto.

10 When the management of an oil industrial concern is takenover by the Board, the Board may, by order notified in theOfficial Gazette, appoint as many persons as it thinks fit tobe the Directors of that concern and nothing in theCompanies Act, 1956 or in any law or instrument relating tothe concern, in so far as it makes, in relation to a Director,any provision for the holding of any share qualification, agelimit, restrictions on the number of directorships retirementby rotation or removal from office shall apply to any Directorappointed by the Board under this section.

11 On the issue of a notified order under section 10-(a) all persons holding office as Directors of the oil industrialconcern or in change of the management of suchconcern immediately before the issue of the notifiedorder shall be deemed to have vacated their offices as

such;(b) the Directors appointed under section 10 shall take suchsteps as maybe necessary to take into their custody orunder their control the property, effects and actionableclaims to which the oil industrial concern is, or appears tobe, entitled and all the property and effects of theconcern shall be deemed to be in the custody of theDirectors as from the date of the notified order;(c) the Directors appointed under section 10 shall for allpurposes be the Directors of the oil industrial concern


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Powersandduties of theDirectors

No right toCompensationfor loss ofoffice

Application ofAct 1 of 1956

duly constituted under the companies Act, 1956 andshall alone by entitled to exercise all the powers of theDirectors of the concern, whether such powers arederived from the said Act or form the memorandumorarticles of association of the concern or fromany othersource.

12 (1)Subject to the control of the Board, the Directorsappointed under section 10 shall take such steps as maybe recessary for the purpose of efficientlymanagingthebusiness of the oil industrialconcern and shall exercisesuch powers and perform such duties as may beprescribed.(2)Withoutprejudiceto the generalityof the powers vestedin them under sub-section (1), the Directorsappointedunder section 10 may,with the previousapprovalof theBoard, make an applicationto a court of the purpose ofcanceling or varyingany contract or agreement enteredinto, at any time before the issue of the notifiedorderunder section 10, between the oil industrialconcern andany other person and the court may, ifsatisfiedofferdueinquiry that such contract or agreement had beenentered into in bad faith and is detrimental to the

interests of the concern, make an order canceling orvarying (either unconditionally or subject to suchconditions as it may think fit to impose) that contract oragreement and the contract or agreement shallaccordingly stand cancelled or, as the case may be,have effect as so varied.13 (1) Notwithstanding anything contained in any law for thetime being in force, no Director or other person in changeof the management of an oil industrial concernimmediately before the issue of a notified order undersection 10 in respect of such concern shall be entitled toany compensation for the loss of office or for thepremature termination under this Act of the contractentitling him to be in charge of such management.

(2) Nothing contained in sub-section (1) shall affect the rightof any Director or other person referred to therein torecover from the oil industrial concern moneysrecoverable otherwise than by way of suchcompensation.

14 (1) Where the management of an oil industrial concern,being a company as defined in the companies Act, 1956is taken over by the Board, then, notwithstandinganything contained in the said Act or in the memorandumor articles of association of such concern-


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1 of 1956

Duties ofexcise

(a) it shall not be lawful for the shareholders of suchconcern or any other person to nominate or appoint anyperson to be a Director of such concern;(b) no resolution passed at any meeting of the shareholdersof such concern shall be given effect to unless approved

by the Board;(c) no proceedingfor the winding up of such concernor forthe appointmentof a receiverin respect thereofshall liein court,exceptwiththeconsentofthe Board.(2) Subject to the provisions contained in sub-section (1)and to the other provisions contained in this Act andsubject to such other exceptions, restrictions andlimitations, if any, as the Central Government may, bynotification in the Official Gazette, specify in this behalf,the Companies Act, 1956 shall continue to apply to such

concern in the same manner as it applied thereto beforethe issue of the notified order under section 10.CHAPTER III

FINANCE, ACCOUNTS AND AUDIT15 (1) There shall be levied and collected, as a cess for the

purposes of this Act, on every item specified in column 2of the schedule, which is produced in India (including thecontinental shelf thereof) and-(a) removed to a refineryor factory; or(b) transferred by the person by whom such item isproduced to another person,

a duty of excise at such rate not exceeding the rate setforth in the corresponding entry in column 3 of theSchedule, as the Central Government may, bynotification in the Official Gazetee, specify:Provided that until the Central Government specifies bysuch notification the rate of the duty of excise in respectof crude oil (being an item specified in the schedule) theduty of excise on crude oil under this sub-section shallbe levied and collected at the rate rupees sixty pertonne.

(2) Every duty of excise leviable under sub -section (1) onany item shall be payable by the person, by whom suchitem is produced, and in the case of crude oil, the duty of


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1 of 1944

Crediting ofproceeds ofduty toConsolidatedFund of India

Grants andloans by theCentral Govt.

Oil IndustryDevelopmentFund

excise shall be collectedon the quantity receivedin arefinery.(3) The duties of excise under sub-section 91) on the itemsspecified in the Schedule shall be in addition to any cessor duty leviable on those items under any other law forthe time being in force.(4) The provisions of the Central Excises and Salt, Act,

1944 and the rules made thereunder, including thoserelating to lefunds and exemptions from duties shall, asfar as may be, apply in relation to the levy and collectionof duties of excise leviable under this section and for thispurpose the provisions of that Act shall have effect as ifthat Act provided for the levy cf duties of excise on allitems specified in the Schedule..

16. The proceeds of the duties of excise levied under section 15shall first be credited to the Consolidated Fund of India andthe Central Government may, if Parliament by appropriationmade by law in this behalf, so provides, pay to the Board .from time to time, from out.of such proceeds, after deductingthe expenses of collection, such sums of money as it maythink fit for being utilized exclusively for the purposes of thisAct.

17 The Central Government may also, after due appropriationmade by Parliament by law in this behalf, pay to the Boardby way of grants or loans such slims of money as theCentral Government may consider necessary.

18 (1) There shall be formed a Fund to be called the OilIndustry Development Fund and there shall be creditedthereto-

(a) any sums of money paid under saction 16 or section 17;(b) any grants that may be made by any person or institutionfor the purposes of this Act;(c) any borrowings by the Board;(d) the sums, if any, realized by the Board in carrying out itsfunctions or in the administration of this Act.(2) The Fund shall be applied-

(a) for meeting the salaries, allowances, honorariaand other remuneration of the officers and otheremployees of the Board and of the advisers,consultants or other agencies whose services are


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Power toborrow

Accounts andaudit

Power torequirepersonsengaged in oil

availed ofby the Board;(b) for meeting the other administrativeexpenses ofthe Board;(c) for rendering assistance under section 6;(d) for repaymentof any loans taken by the Boardorfor meeting other liabilities under this Act.

19 Subject to such rules as may be made in this behalf, theBoard shall have the power to borrow on the security of theOil Industry Development Fund or any other asset forcarrying out the purpose of this Act.20 (1) The Board shall maintain proper accounts and otherrelevant records and prepare an annual statement ofaccounts, including the profit and loss account and thebalance sheet in such form as may be prescribed by theCentral Government in consultation with the Comptrollerand Auditor-General of India.

(2) The accounts of the Board shall be audited by theComptroller and Auditor-General of India at suchintervals as may be specified by him and anyexpenditure incurred in connection with such audit shallbe payable by the Board to the Comptroller and Auditor-General.(3) The Comptroller and Auditor-General of India and any

person appointed by him in connection with the audit ofthe accounts of the Board shall have the same rightsand privileges and authority in connection with suchaudit as the Comptroller and Auditor-General has inconnection with the audit of Government accounts and,in particular, shall have the right to demand theproduction of books, accounts, connected vouchers andother documents and papers and to inspect any of theoffices of the Board.(4) The accounts of the Board as certified by theComptroller and Auditor-General of India or any other

person appointed by him in this behalf together with theaudit report thereon shall be forwarded annually to theCentral Government and that Government shall causethe same to be laid before each House of Parliament.CHAPTER IV

CONTROLBY THE CENTRAL GOVERNMENT


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industry tomaintain &producebooks,accounts &recordsrelating tobusiness &inspectionthereof

Directions bythe CentralGovt.Exemptionfrom liabilityto payincome-tax

Penalties

OtherPenalties

21 The Central Government may, by order notified in the officialGazette, require all persons engaged in oil industry or anyclass of such person-(a) to maintain such books, accounts and records relating totheir business as may be specified in the order;(b) to produce such books, accounts and records forinspection and to furnish such information relatingthereto to such officer or authority and at such times or insuch circumstances asmay be specified in the order;

22 The Board shall carry out such directions as may be issuedto it from time to time by the Central Govt. for the efficientadministration of this Act.22A "Notwithstanding anything contained in the Income-Tax Act,1961, the Board shall not be liable to pay any income-tax on

its income, profits or gains."

CHAPTER VMISCELLANEOUS

23 Any personwho-(a) being required under this Act to produce any books,accounts or records or furnish any information, fails to

produce such books, accounts or records or fails tofurnish such information or furnishes information whichis false, and which he either knows or believes to befalse, or does not believe to be true; or

(b) obstructs any member or any officer or other employeeof the Board or any person authorized in this behalf bythe Central Government or by the Board in the exerciseof any power conferred or in the discharge of any dutyimposed on him by or under this Act,shall be punishable with imprisonment which mayextend to one year, or with fine which may extend to fivethousand rupees, orwith both.

24 Whoever contravenes or attempts to contravene or abetsthe contravention of any of the provisions of this Act or ofany rule made thereunder (other than the provisions for thecontravention of which section 23 applies), shall bepunishable with imprisonment for a term which may extendto three months, or with fine which may extend to five


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Offences bycompanies

Jurisdiction ofcourts

Previoussanction ofCentral Govt.Previoussanction ofCentral Govt.

-- -- -- - -- - - - - - -- - _u - -

hundred rupees, orwithboth.25 (1)Where an offence under this Act has been committedbya company, every person who, at the time the offencewas committed,was in charge of, and was responsibleto, the company for the conduct of the business of thecompany as well as the company shall be deemed to be

guiltyof the offence and shall be liableto be proceededagainst and punishedaccordingly:Providedthat nothingcontained in this sub-sectionshallrender any such person liableto any punishment,if heproves that the offence was committed without hisknowledge or that he exercised all due diligence toprevent the commissionofsuch offence.

(2) Notwithstandinganything contained in sub-section (1),where an offenceunder thisAct has been committedbya company and it is proved that the offence has beencommitted with the consent or connivance of, or isattributable to any neglect on the part of, any director,manager, secretary or other officerof the company, suchdirector,manager, secretary or other officershall also bedeemed to be guiltyofthat offenceand shall be liabletobe proceeded against andpunishedaccordingly.Explanation - for the purposes of this section-

(a) "company"means any body corporate and includes afirm or other association of individuals;and

(b) "director",in relation to a firm,means a partner in thefirm.26 No court inferiorto that of a MetropolitanMagistrate or amagistrate of the first class shall try any offence punishableunderthisAct.27 No prosecution for any offence punishable under this Actshall be instituted except with the previous sanction of theCentral Government.28 No suit, prosecution or other legal proceeding shall lieagainst the Central Government or the Board or anycommittee constituted by the Board or any member of theBoard or of such committeeor any officeror other employeeofthe CentralGovernmentor ofthe Board or any agent oforany other person authorizedby the Central Governmentorthe Board, for anything which is in good faith done orintended to be done under this Act or the rules madethereunder.


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Dissolution ofthe Board

Act to haveoverridingeffect Powerto make rulesPower tomake rules

29 (1) The Central Government may, if satisfied that it isnecessary so to do in the public interest, direct bynotificationin the OfficialGazette that that Board shallbe dissolvedfromsuch date and forsuch periodas maybe specifiedinthe notification.(2) When the Board is dissolved under the provisions ofsuch-section(1)-

(a) all members, notwithstandingthat their term ofoffice has not expired, shall from the date ofdissolution,vacate theirofficesas such members;(b) all powers and duties of the Board shall, duringthe period of dissolution, be exercised andperformed by such person or persons as theCentralGovernmentmayappointinthis behalf;(c) all funds and other propertiesvested in the Boardshall during the period of dissolution,vest in the

. Central Government.(3) As soon as the period of dissolutionexpires, the Boardshall be reconstitutedin accordance with the provisionsofthis Act.

30 The provisions of this Act shall have effect, notwithstandinganything inconsistent therewith contained in any enactmentother than this Act.

31 (1) The Central Government may, by notification in theOfficialGazette, make rules to carry out the purposes ofthis Act;(2) In particular and without prejudice to the generality ofthe foregoing power, such rules may provide for all orany ofthe followingmattersnamely:-

(a) the term of officeand other conditionsof serviceof members, the manner of filling vacanciesamong and the procedure to be followedin thedischargeoftheirfunctions;

(b) the powers which may be exercised and theduties which shall be performed by the Secretaryto the Board;(c) the circumstances in which and the authoritybywhicha membermaybe removed.


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(d) The holdingof a minimumnumberof meetingsoftheBoardeveryyear;(e) The conv~ning of meetings of the Board and of itsComm,itte,es the procedure to be followed at themeetings of the Board and of its Committees for

the conduct of business and the number of themembers which shall form quorum at a meeting;(f) The maintenance by the Board of records ofbusiness transacted by the Board and thesubmission of copies thereof to the CentralGovernment.(g) The powers of the Board, its Chairman and othermembers, $ecretary and committees of the Boardwith respect to the incurring of expenditure;(h) The conditions subject to which the Board mayincur expenditure outside India;(i) The preparation of budget estimates of receiptsand expenditure of the Board and the authority bywhich the estimates are to be sanctioned;0) The form and manner in which the accountsshouldbekeptbytheBoard;(k) The custody and investment of the funds of the

Board;(I) The conditions to be observed by the Board inborrowing money;(m) The conditions subject to which and the mannerin which contracts may be entered into by or onbehalf of the Board;(n) The delegation to the Chairman, Secretary ormembers or officers of the Board of any of thepowers and duties of Board under this Act;(0) The additional measures for the promotion ofwhich the Board may render assistance;(p) The remuneration and other allowances payableto the person or persons referred to in clause (b)of sub-section (2) of section 29;(q) The fees which the Board may charge for any


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assistance or services rendered by it under thisAct;(r) The staff which may be employedby the Boardand the pay and allowancesand leave and otherconditionsof service of officers (other than thoseappointed by the Central Government)and other

employeesof the Board;(s) Any other matter which is to be or may beprescribedor providedfor by rulesunderthisAct.

(3) Every rule made by the Central Government under thissection shall be laid, as soon as may be after it is made,before each House of Parliament, while it is in session,for a total period of thirty days which may be comprisedin one session or in two or more successive sessions,and if before the expiry of the session immediatelyfollowing the session or the successive sessionsaforesaid, both Houses agree in making anymodification in the rule or both Houses agree that therule should not be made, the rule shall thereafter haveeffect only in such modified form or be of no effect, asthe case may be; so, however, that any suchmodification or annulment shall be without prejudice tothe validity of anything previously done under that rule.

THE SCHEDULE[See section 15 {1}]

51. Name of ItemNo. The maximum rate at which duty ofexcise may be collected1. 2. 3.1. Crude OiL.......................... @ Rupeesonethousandpertonne.2. NaturalGas... ......... @... ..Rupees three hundred per thousandcubic meters.

@ As amended in Finance Bill 1987 (clause 108)Actual rate of cess on crude oil.

13.7.1981 Rs.100 per tonne


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15.2.198301.3.198701.2.1989* Three amendments are placed at page no. 16.

RS.300 per tonneRS.600 per tonneRS.900 per tonne


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MINISTRYOF ENERGY(Department of Petroleum)

NOTIFICATIONNew Delhi, the 15thFebruary, 1983

S.O. 115 (E) - In exerciseof the powersconferredby sub-section(1) ofSection 15 of the Oil Industry (Development)Act, 1,974(47 of 1974) and insupersession of the notification of the Government of India in the erstwhileMinistry of Petroleum, Chemicals & Fertilizers (Department of Petroleum)No.S.O. 556 (E). dated the 13thJuly, 1981,the CentralGovernmentherebyspecifiesthe rate of duty of excise in respectof crude oil (being an item specifiedin theSchedule)at the rateof rupeesthreehundredpertonne.2. This notification shall come into force on and from the date of itspublicationin theOfficialGazaette.

[No.7/2/83-Fin. II]R. VENKATESAN, Jt. Secy.MINISTRY OF PETROLEUM AND NATURAL GAS

NOTIFICATIONNew Delhi, the 1st March, 1987

S.O. 147(e) - In exercise of the powers conferred by sub-section (1) of Section15 of the Oil Industry (Development) Act, 1974 (47 of 1974) and in supersessionof the notification of the Government of India in the late Ministry of Energy(Department of Petroleum), No. S.O. 115 (e), dated the 15thFebruary, 1983, theCentral Government hereby specifies the rate of duty of excise in respect ofcrude oil (being an item specified in the Schedule) at the rate of rupees sixhundred per tonne.2. This notification shall come into force on and from the date of itspublication in the Official Gazaette.

[F.No. G-34026/1/87-Fin. II]S.BALACHANDRAN, Jt. Secy.


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MINISTRY OF PETROLEUM AND NATURAL GASNOTIFICATION

New Delhi, the 1st February, 1989S.O. In exercise of the powers conferred by sub-section (1) ofSection 15 of the Oil Industry (Development) Act, 1974), and in supersession ofthe notification of the Government of India in the Ministry of Petroleum & NaturalGas, No. S.O. 147 (e), dated the 1stMarch, 1987 the Central Government herebyspecifies the rate of duty of excise in respect of crude oil (being an item specifiedin the Schedule to the said Act) at the rate of rupees nine hundred per tonne.2. This notification shall come into force on and from the date of itspublication in the Official Gazaette.

{F. NO. G-34026/1/87-Fin.lI}S. BALACHANDRAN, Jt. Secy.


New Delhi, the 9th November, 1998S.O. 958 (E) - In exercise of the powers conferred by sub-section (4) of Section15 of the Oil Industry (Development) Act, 1974), read with sub-section (1) ofsection 5A of the Central Excises Act, 1944 (1 of 1944), the Central beingsatisfied that it is necessary in the public interest so to do, hereby exempts crudeoil produced in the exploration blocks to be offered under New ExplorationLicensing Policy (N.E.L.P.) through competitive international bidding from thecess leviable thereon under sub-section (1) of section 15, thereof.

{F. NO. G-38026/3/97-Fin.lI}RAVI SAXENA, Jt. Secy. And Financial Adviser


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New Delhi, the 28thFebruary, 2002S.O. 259 (E) - In e)(ercise of the powers conferred by sub-section (1) ofSection 15 of the Oil Industry (Development) Act, 1974), and in supersession ofthe notification of the Government of India in the Ministry of Petroleum andNatural Gas, number S.0.101(E), dated the 1st February, 1989, the CentralGovernment hereby specifies the rate of duty of excise in respect of crude oil(being an item specified in the Schedule to the said Act) at the rate of rupees onethousand eight hundred per tonne.2. This notification shall come into force with effect from 1stMarch, 2002.

{F. NO. G-35012/3/2Q01-Fin.ll}J.M. MAUSKAR, Jt. Secy.


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New Delhi, the 12th April, 2002S,0.417 (E) - In exercise of the powers conferred by sub section (4) of

section 15 of the Oil Industry (Development) Act, 1974 (47 of 1974), read withsection 5(A) of the Central Excise Act, 1944 (1 of 1944), the Central Government,being satisfied that it is necessary in the public interest so to do, hereby exemptsthe duty of excise on crude oil production from the fields under the ProductionSharing Contracts mentioned in .the Table below to the extent d rupees ninehundred per tonne as against the rate of duty of excise of Rupees One thousandeight hundred per tonne specified vide notification of the Government of India inthe Ministry of Petroleum & natural Gas number S.0.259 (E) dated the 28thFebruary, 2002.TABLE

Serial Name of the field under Production SharingNo. Contracts1. Panna and Mukta Fields2. Rawa Field3. KharsanQField4. Mid and South Tapti Fields5. Hazira Field6. Bhandut Field7. Matar Field8. Sabarmati Field9. Cambav Field10. Indrora Field11. Bakrol Field12. Lohar Field13. Oholka Field14. Wavel Field15. Baola Field16. Asiol Field17. PY-1 field18. North Balol Field19. Allora Field20. Unawa Field21. Oholsan Field22. Kanwara Field23. Modhera Field24. AmQuri Field25. North Kathana Field26. Sanqanpur Field


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2. This notificationshall come into force on the date of its publicationinOfficialGazette.

(F.No. G-35012/7/2001-Fin.lI)J.M. MAUSKAR, Jt. Secy.

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