2014 (9) TMI 843 - AT - Central Excise

Supply of motor spirit for blending with ethanol by availing the concessional rate of duty prescribed under Notification No. 62/2002-C.E. - Violation the terms and condition of Notification No. 28/2002-C.E., dated 13-5-2002 - Held that - The entire clearance of motor spirit for blending with ethanol is governed by the Procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. As per Rule 6 of the said Rules - it is the recipient/buyer of the goods, who has to lead evidence with respect to the intended usage and not the supplier of the goods and if the recipient/buyer has not informed to the excise authority, they are liable to discharge differential duty liability along with interest. Therefore, in respect of the supplies made to IOCL and HPCL, the responsibility and liability to discharge the differential duty liability lies with those units and not with the appellant, who is only the supplier of the goods. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Appeal against Order-in-Original confirming duty demand for violating Notification No. 28/2002-C.E.

Analysis:
1. The appellant, a manufacturer of petroleum products, supplied motor spirit for blending with ethanol under concessional duty rates. The duty demand was raised due to alleged non-compliance with end-use criteria, resulting in a short payment of duty.

2. The appellant contended that they had submitted invoices, applications for removal, and buyer statements to prove compliance with the end-use condition. The appellant argued that the demands were unsustainable as the submitted documents were not considered by the department.

3. The Tribunal noted that under the Central Excise Rules, the responsibility to prove intended usage lies with the buyer, not the supplier. For supplies to IOCL and HPCL, the duty liability rests with the recipient units, not the appellant. However, for the appellant's own depots, evidence of usage and compliance with BIS standards must be provided.

4. The Tribunal directed the matter back to the adjudicating authority for a fresh consideration. The appellant was given two months to submit the required documents, including simple accounts and Annexure-II returns, for verification by the excise authorities. The authority was instructed to pass a speaking order after reevaluation.

5. The appeal was allowed by way of remand, emphasizing the need for the appellant to furnish the necessary details for a reassessment of the differential duty liability. The Tribunal's decision focused on procedural compliance and the allocation of responsibility between the supplier and the buyer in establishing end-use criteria for concessional duty rates.