2006 (12) TMI 319 - AT - Central Excise

Summary

Issues:
Interpretation of exemption notification for furnace oil clearance from different warehouses.

Analysis:
The case involved a dispute regarding the duty payment of Rs. 5,93,16,880 on furnace oil clearance due to the denial of exemption notification 29/02 amended by notification No. 34/02-CE. The dispute arose as the product cleared from the Digboy refinery to Tinsukia terminal and then to Silliguri warehouse for final clearance was considered ineligible for exemption by the Revenue. The Revenue contended that the exemption was only applicable for clearance from the refinery or the first warehouse, not the second warehouse.

The Revenue's argument was based on the premise that the exemption was limited to clearances from the refinery or the first warehouse, excluding the second warehouse. However, the Revenue failed to cite a specific provision in the notification supporting this interpretation. The Tribunal found that the appellants were prima facie entitled to the benefit of the exemption notifications, especially considering the explanation provided in notification 34/02 dated 21-6-2002, which clarified the scope of the exemption.

The appellant's counsel argued that the explanation in the notification should have retrospective effect as it was clarificative in nature. Additionally, it was highlighted that during the relevant period, warehousing provisions under Rule 20 along with notification No. 47/01 were applicable to petroleum products. Considering these arguments and the lack of specific provisions denying exemption for clearance from the second warehouse, the Tribunal allowed the stay application and dispensed with the pre-deposit of duty until the appeal's disposal, scheduling the matter for further hearing.

In conclusion, the Tribunal ruled in favor of the appellant, granting a stay on the duty payment and ordering no pre-deposit until the appeal's final resolution, emphasizing the need for a detailed hearing on the matter in due course.