2012 (3) TMI 364 - AT - Central Excise

Waiver of pre-deposit of duty - facility of removal of petroleum products without payment of duty from refineries to warehouses was withdrawn with effect from September, 2004 - duty in respect of petroleum products which remained in the pipe line namely BPT pipeline and Pirpau pipeline - Held that - BPT pipeline does not belong to the applicant and Pirpau pipeline is within the factory limit of the applicant, therefore, prima facie, the applicant made out a strong case in their favour. Pre-deposit of dues is waived and recovery thereof is stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
1. Application for waiver of pre-deposit of duty, interest, and penalty.
2. Demand of duty on petroleum products in BPT pipeline and Pirpau pipeline.
3. Ownership of pipelines and duty liability.
4. Factual position clarification by Revenue.
5. Affidavit supporting ownership claim.
6. Decision on waiver of pre-deposit and stay of recovery during appeal.

Analysis:
The judgment pertains to an application for the waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 3,51,26,013/- in a case where duty was demanded on petroleum products in the BPT pipeline and Pirpau pipeline. The Revenue confirmed the demand citing the withdrawal of the facility for duty-free removal of petroleum products from refineries to warehouses post-September 2004. The applicant contended that the BPT pipeline did not belong to them but to the Bombay Port Trust, thereby absolving them of duty liability for products in that pipeline. Regarding the Pirpau pipeline, the applicant argued that it was within their factory limit, products in the pipeline were part of their inventory stock, cleared subsequently on payment of duty, and thus the demand was not justified.

During the proceedings, the Revenue was directed to ascertain the factual position, which was reiterated in a subsequent letter. An affidavit was filed by a senior manager supporting the claim that the Pirpau pipeline belonged to the applicant while the BPT pipeline did not. Considering the applicant's consistent stance on pipeline ownership and the location of products, the Tribunal found a strong prima facie case in their favor. Consequently, the pre-deposit of dues was waived, and recovery stayed pending the appeal. The decision took into account the facts, circumstances, and the revenue involved, with the appeal scheduled for a specific date.

In conclusion, the stay petition was allowed, and the Tribunal's decision favored the applicant based on the ownership claims of the pipelines and the absence of duty liability as argued. The judgment highlighted the importance of factual clarity, ownership documentation, and the impact on revenue in determining the waiver of pre-deposit and the stay of recovery during the appeal process.