2010 (12) TMI 1013 - HC - Central Excise

Penalty - Tribunal remanded the matter back to the Original Authority for causing a verification of the respondent s claim that the furnace oil moved to its Nagapattinam Unit following the warehousing procedure has been process/cleared on payment of appropriate duty - Held that - Tribunal set aside the penalty. The respondent did not challenge the liability of payment of duty though it was under the bona fide belief that it could move the furnace oil produced in the Manali Unit duty-free under the warehousing procedure to its Nagapattinam Unit, where it could be assessed to necessary duty liability. When such movement of furnace oil produced at Manali Unit to Nagapatiinam Unit was made, the same was not questioned by the Department, which weighed with the Tribunal while considering the scope of levy of penalty, such a perception weighed with the Tribunal for setting aside the penalty does not give any scope for any question to be considered in this appeal, especially when the Tribunal remitted the matter back to the Original Authority to assess the duty liability after giving an opportunity to the respondent, appeal, therefore, fails and the same is dismissed

Summary

Issues:
Challenge to order of Appellate Tribunal remanding matter for verification of duty payment on furnace oil moved to Nagapattinam Unit under warehousing procedure.

Analysis:
The appellant, the Commissioner of Central Excise and Service Tax, Large Tax Payer Unit, challenged the order of the Appellate Tribunal dated 11-5-2010. The Tribunal remanded the matter back to the Original Authority for verifying the respondent's claim regarding the furnace oil moved to its Nagapattinam Unit under the warehousing procedure and payment of appropriate duty. The Tribunal directed that any demand against the respondent could only be sustained for oil not disposed of without proper duty payment. The respondent, a public sector undertaking, believed it could move the furnace oil duty-free under the warehousing procedure to Nagapattinam Unit for processing and payment of duty. The Tribunal noted that the department did not object to this movement and no action was taken for non-warehousing. The Tribunal set aside the penalty as the respondent did not challenge the duty liability, and the movement of oil was not questioned by the Department.

Upon examination of the appellant's grievance, the Court found no substantial question of law to be considered as the Tribunal had set aside the penalty. The respondent did not dispute the duty payment liability and believed in good faith about the duty-free movement of oil. The Tribunal's decision to remit the matter back to the Original Authority for assessing duty liability after providing an opportunity to the respondent was based on the circumstances where the Department did not raise any objections to the movement of oil. The Tribunal's rationale for setting aside the penalty did not leave any room for further legal scrutiny in the appeal. Therefore, the Court dismissed the appeal, stating that there was no basis for any questions to be raised, especially when the Tribunal had already addressed the duty liability issue by remanding the case for assessment.

In conclusion, the appeal by the Commissioner of Central Excise and Service Tax, Large Tax Payer Unit, was dismissed, and no costs were awarded in this matter.