2014 (8) TMI 360 - AT - Central Excise

Demand of differential duties on withdrawal of inbond movement of petroleum products - Movement of petroleum products through the pipelines - transit loss - Notification No. 17/2004-CE (NT) dtd 4.9.2004 - reconciliation of various petroleum products for the purpose of payment of duty - Held that - various procedures and reconciliation methods have been prescribed by CBEC from time to time as submitted by appellant. It is also observed from the EXB XII at Page 142 of the current appeal paper book that all the details/statements were submitted by the appellant. No specific findings have been given by the Adjudicating Authority on this reconciliation made as to why reconciliation made by the appellant are not acceptable. It is also observed from the findings in Para 12, 13.3, 13.4 and 13.6 of the impugned OIO dated 8.12.2012 that Adjudicating Authority has simply relied upon the earlier findings in adjudication order dtd 31.12.2008 which was set aide by the order dtd 31.1.2011 passed by this Bench. It is improper to rely upon the findings of an adjudicating order which is no more existing - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Appeal against demand confirmation and penalty imposition.

Analysis:
The appellant filed a stay application and appeal challenging the Order-in-Original (OIO) passed by the Commissioner confirming a demand of Rs. 52,08,73,907/- and imposing a penalty of Rs. 50 lacs. The appellant contended that the issue was previously remanded by CESTAT for reconciliation of duty paid. The appellant supplied petroleum products through various pipelines and followed CBEC circulars for clearance and duty payment. Despite providing details and reconciliations, the Adjudicating Authority failed to appreciate the issue under CBEC circulars. The appellant argued that losses in one product could be offset against gains in another as per circulars. The Commissioner relied on earlier findings, which were set aside by CESTAT, leading to the current appeal.

The Revenue argued that the appellant failed to furnish details for reconciliation, justifying the demand confirmation and penalty imposition. After hearing both sides and perusing the records, the Tribunal observed that the issue revolved around the payment of differential duties on the withdrawal of inbond movement of petroleum products without duty payment post-Notification No. 17/2004-CE. The appellant claimed to have reconciled duties as per the notification and paid Rs. 88.33 crores. The Tribunal noted the prescribed procedures and reconciliations by CBEC, with appellant's submissions on record. The Adjudicating Authority did not provide specific reasons for rejecting the appellant's reconciliations and relied on outdated findings. Consequently, the Tribunal set aside the OIO and remanded the matter for fresh adjudication, directing the appellant to submit updated reconciliation details. The Adjudicating Authority was instructed to provide original findings after affording the appellant a personal hearing in denovo proceedings.

In conclusion, the Tribunal allowed the appeal by remanding the matter to the Adjudicating Authority for a fresh decision based on the case facts and updated reconciliations, ensuring a fair opportunity for the appellant to present their case.