2010 (6) TMI 382 - AT - Central Excise

Demand Storage loss of Motor spirit and HSD - quantity sold, shown in the RT-12 returns and considered in Annexure-II of the show cause notice - The percentage loss was below 0.5% - no justification for confirmation of demand of duty

Summary

Issues involved:
1. Inclusion of Retail Pump Outlet (RPO) charges in the assessable value of oil.
2. Confirmation of demands against the appellants for storage losses on petroleum products at their installation.

Analysis:

Issue 1: Inclusion of RPO charges in assessable value:
The Tribunal referred to the case of IOCL v. CCE, Bangalore, which was approved by the Hon'ble Supreme Court. The decision in this case established the precedent regarding the inclusion of Retail Pump Outlet (RPO) charges in the assessable value of oil. This legal position was crucial in determining the outcome of the present appeal.

Issue 2: Confirmation of demands for storage losses:
The Commissioner confirmed demands against the appellants concerning storage losses on various petroleum products at their installation. The Commissioner relied on guidelines issued by the Board, emphasizing that storage losses are condonable if there is no mala fide intention or doubt regarding the losses. The guidelines also specified a ceiling limit for allowable losses, which needed to be adhered to by the assessee. The Commissioner noted that the appellants failed to apply for condonation on a monthly basis to demonstrate that their accumulated losses were within the prescribed limit of 0.5%. Consequently, the duty on storage losses was confirmed.

The learned Consultant presented statements indicating the percentage loss of Motor Spirit and High-Speed Diesel (HSD) during a specific period, showing that the losses were below 0.5% in all cases. Based on this evidence, the Tribunal found no justification for confirming the demand for duty on storage losses.

In conclusion, the Tribunal held that the impugned order of the Commissioner on both issues was liable to be set aside. The appeal was allowed, providing the appellants with consequential relief. The decision was dictated and pronounced in the Court by the Members of the Tribunal.