2011 (11) TMI 248 - AT - Central Excise

Notification No.17/2004 CE (NT) dated 04/09/2004 withdrawing warehousing facilities in respect of petroleum products assessee liable to pay duty on the stocks lying in the warehouse as on the midnight of 05/06.09.2004 and also on the products in transit - dispute arose regarding appropriate duty on correct quantum of stock demand raised on the basis of contrary statement recorded - Held that It could be ascertained from the documentary evidence available with the appellants and can also be verified from the records (documents) whether the appellant has discharged the correct duty or not. Therefore, the matter needs examination at the end of the Commissioner, who shall depute some official to co-relate the stock warehoused goods on which duty is payable and the records of duty paid and shall pass an order after verifying the records produced.

Summary

Issues:
- Duty demand confirmation along with interest and penalty
- Withdrawal of warehousing facilities for petroleum products
- Dispute regarding duty payment on stock in warehouse and in transit
- Reliance on statements vs. documentary evidence for duty demand
- Need for examination and co-relation of stock and duty payment records

Analysis:
- The appeal was filed against the duty demand confirmation of Rs.1,25,38,267/- along with interest and penalty. The appellant, an oil corporation, sought a stay of the demand and early hearing, which was granted. The issue revolved around the duty liability on stocks in the warehouse and in transit due to the withdrawal of warehousing facilities for petroleum products as per a specific notification.
- The Commissioner relied on statements rather than documentary evidence to conclude that the appellant had underpaid duty. The appellant contended that they had correctly discharged the duty, presenting stock statements and records for verification. The Tribunal noted that the demand was based on contrary statements and not documentary evidence as required by law.
- The Tribunal emphasized the need for examination by the Commissioner to co-relate the warehoused goods and duty payment records. If any discrepancies are found, a show-cause notice would be justified; otherwise, the duty payment should be verified through co-relation. The Commissioner was directed to verify the records and provide a reasonable opportunity for the appellant to present their case.
- Ultimately, the appeal, stay application, and application for early hearing were disposed of, highlighting the importance of proper examination and verification of records in duty demand cases to ensure fairness and compliance with the law.