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2015 (4) TMI 932 - AT - Central ExciseClearance of Aviation Turbine Fuel from Unregistered export warehouse - Amended Notification No. 47/01-CE (NT) dated 26/6/01 allows removal of petroleum products without payment of duty for export warehousing - Held that - The appellant have a warehouse for storage of various petroleum products including ATF at Shakur Basti. Beside this, BPCL and HPCL also have similar warehouses at Shakur Basti for the purpose of export. During period prior to 06/9/04, non-duty paid petroleum products including Aviation Turbine Fuel were being received in these warehouses and while the Aviation Turbine Fuel was being supplied as export under bond under Rule 19 to Foreign going aircrafts, other petroleum products were being cleared on payment of duty. During the period prior to 6/9/04 Notification No. 46/01-CE dated 26/6/01 permitted clearances of any excisable goods by a manufacturer without payment of duty to a bonded warehouse for export there from there under Rule 19 subject to condition that the warehouse is located at the approved station and the same has been approved by the Commissioner. This notification issued under Rule 20 (1) of the Central Excise Rules, 2001 was applicable to all excisable goods including the petroleum products and the same is still in force and has not been amended. Notification No. 47/01-CE (NT)dated 26/6/01 also issued under Rule 20 (1) of the Central Excise Rules, 2001 permitted removal of only certain excisable goods mentioned in the table annexed to this notification, without payment of duty to a bonded warehouse or from one bonded warehouse to another bonded warehouse. By amending Notification No. 17/04-CE (NT) dated 04/9/04 Sl. No. 1 of the table to the Notification No. 47/01-CE (NT) was deleted as a result of which w.e.f. 06/9/04 the petroleum products manufactured by refinery could no longer be cleared without payment of duty to a bonded warehouses. However, as mentioned above, Notification No. 46/01-CE (NT) still continued and has not been amended in any manner. In other words w.e.f. 06/9/04, while the oil refineries could no longer clear the petroleum products without payment of duty to a bonded warehouses for storage there, they could still clear the petroleum products for the purpose of export to a bonded warehouse for export from that warehouse. It is for this reason that the Board vide Circular No. 798/31/04-CX dated 08/9/04 clarified that while the facility of removal of petroleum products without payment of duty from a Refinery to a bonded warehouse or from one bonded warehouse to another bonded warehouse has been withdrawn w.e.f. 06/9/04 vide Notification No. 17/04-CE (NT) dated 04/9/04, the facility of removal of petroleum products without payment of duty for export warehousing continues to be available under Notification No. 46/01-CE (NT). This position was reiterated again in the Board s Circular No. 804/1/2005-CX. dated 04/1/05 and in this Circular the Board also clarified that for the purpose of exports, separate storage of the duty paid and non-duty paid petroleum products is not required subject to condition that tank wise account is maintained about the receipt and discharge of duty paid and non-duty paid petroleum products. The only objection of the Department in this case is that the Shakur Basti Warehouse is not approved by the Commissioner and separate registration as intermediate warehouse has not been obtained. In our view this objection is without any basis, as we find that immediately after amendment to Notification No. 47/01-CE (NT) by Notification dated 04/9/04, the appellant under their letter dated 13/9/04 addressed to the Commissioner and had requested for converting the existing bonded warehouse at Shakur Basti as export warehouse under Rule 20 for export of ATF and in response to this Circular, the Department had clarified that since they are already holding a Central Excise registration No. AAAC 116814XM001 with the Division, the same registration number would be used for intermediate export warehouse for export clearances. Thus this letter clearly shows that the required registration as intermediate export warehouse has already been granted to the Shakur Basti Warehouse. In view of this, the allegation in the show cause notice that Indian Oil Corporation, Shakur Basti, New Delhi is not a registered export warehouse and therefore is not entitled to receive duty free ATF from IOC s Refinery at Panipat is absolutely without any basis. In view of this, we hold that the impugned order is not sustainable. - Decided in favour of appellant.
Issues Involved:
1. Validity of the removal of petroleum products without payment of duty post-amendment to Notification No. 47/01-CE (NT). 2. Legality of the Shakur Basti warehouse as an export warehouse. 3. Demand of duty and imposition of penalty on the appellant. Issue-wise Detailed Analysis: 1. Validity of the Removal of Petroleum Products Without Payment of Duty Post-Amendment to Notification No. 47/01-CE (NT): The appellant, M/s Indian Oil Corporation Ltd., was involved in the removal of Aviation Turbine Fuel (ATF) without payment of duty to bonded warehouses. This practice was initially permitted under Notification No. 47/01-CE (NT). However, this notification was amended by Notification No. 17/04-CE (NT) on 04/9/04, removing petroleum products from its purview. Consequently, from 06/9/04, petroleum products could no longer be cleared from the refinery without payment of duty for storage in a bonded warehouse. Despite this, Notification No. 46/01-CE (NT), which allowed the removal of excisable goods for export warehousing, remained in force. The Board's Circular No. 798/31/2004-CX dated 08/9/04 clarified that the facility of removal of petroleum products without payment of duty for export warehousing continued to be available under Notification No. 46/01-CE (NT). The appellant continued to clear ATF under ARE-1s for supply to foreign-going aircrafts, adhering to the provisions of Notification No. 46/01-CE (NT), which was not affected by the amendment to Notification No. 47/01-CE (NT). 2. Legality of the Shakur Basti Warehouse as an Export Warehouse: The appellant requested the conversion of their existing warehouse at Shakur Basti into an export warehouse under Rule 20, following the amendment to Notification No. 47/01-CE (NT). The Deputy Commissioner responded, indicating that the existing Central Excise registration would be used for the intermediate export warehouse. The Department's show cause notices alleged that the Shakur Basti warehouse was not a registered export warehouse and thus not entitled to receive duty-free ATF. However, the appellant had sought the necessary approval, and the Department's response implied that the required registration had been granted. Therefore, the allegation that the Shakur Basti warehouse was not a registered export warehouse was unfounded. 3. Demand of Duty and Imposition of Penalty on the Appellant: The Department issued show cause notices demanding duty amounting to Rs. 12,37,99,089/- and Rs. 7,76,30,771/- for the periods from 06/9/04 to 31/3/05 and 01/8/05 to 09/8/05, respectively. The demands were based on the premise that the Shakur Basti warehouse was not a registered export warehouse. Additionally, penalties under Rule 25 of the Central Excise Rules, 2002, and interest under Section 11AB were sought. The Commissioner confirmed these demands and imposed a penalty of Rs. 1,00,00,000/-. However, the Tribunal found that the appellant had adhered to the provisions of Notification No. 46/01-CE (NT) and had obtained the necessary registration for the Shakur Basti warehouse. Consequently, the demands and penalties were deemed unsustainable. Conclusion: The Tribunal concluded that the appellant's actions were in compliance with the applicable notifications and circulars. The Shakur Basti warehouse was considered a registered export warehouse, and the removal of ATF without payment of duty was permissible under Notification No. 46/01-CE (NT). The impugned order was set aside, and the appeals were allowed, nullifying the duty demands and penalties imposed on the appellant.
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