1984 (2) TMI 337 - AT - Central Excise

Summary

Issues:
1. Interpretation of Central Excise Notification No. 5/66 regarding the exemption of excise duty on Furnace Oil supplied to bunker coastal vessels.
2. Determination of whether a vessel engaged in coastal trade or bound for a foreign port is entitled to concessional rates under Notification No. 5/66.
3. Assessment of the vessel M.V. "ELEFTHEUROPOLIS" and the entitlement of the appellants to duty rebate under Central Excise Rule 12.
4. Examination of the vessel's itinerary and cargo details to ascertain its status as a coastal vessel or a foreign-bound vessel.
5. Analysis of the Tribunal's previous orders and their applicability to the present case.

Analysis:

1. The appeal involved the interpretation of Central Excise Notification No. 5/66, which exempted Furnace Oil supplied to bunker coastal vessels from excise duty exceeding a specified amount. The dispute centered around whether the bunker supplied to the vessel M.V. "ELEFTHEUROPOLIS" qualified for the concessional rate under this notification.

2. The appellants contended that the vessel was engaged in coastal trade, making it eligible for the concessional rate under Notification No. 5/66. However, the Department argued that the vessel was bound for a foreign port based on its itinerary and, therefore, not entitled to the concessional rate. The Assistant Collector and the Appellate Collector had previously rejected the appellants' claim on this basis.

3. The appellants also sought duty rebate under Central Excise Rule 12 for bunkers supplied to foreign-bound vessels. The Department maintained that the appellants did not follow the necessary procedures for claiming this rebate, as outlined in separate notifications under Rule 12 and Notification No. 5/66.

4. To determine the vessel's status, the Tribunal examined the vessel's itinerary and cargo details. The vessel arrived in water ballast from a foreign port, loaded indigenous oil cargo at Bombay for Indian ports, and subsequently sailed to a foreign port after discharging the cargo at Vizag and Calcutta. The Tribunal concluded that the vessel's journey constituted a coastal voyage as it involved the carriage of indigenous cargo between Indian ports.

5. The Tribunal distinguished the present case from a previous order regarding bunkers supplied to foreign-going vessels diverted to coastal trade. In this case, the Tribunal found no evidence that the necessary procedures for claiming the concessional rate had not been followed, as alleged by the Department. Therefore, the Tribunal allowed the appeal, granting the appellants the benefit of Notification No. 5/66 and directing the provision of consequential relief within three months.