2017 (4) TMI 496 - AT - Central Excise

N/N. 64/95-CE - denial on the ground that the HSD was cleared to M/s.Indian Oil Corporation and not to Indian Navy/Coast Guard - Held that - the issue on merits is no longer res integra as the same has been decided against the appellants in their own case M/s HINDUSTAN PETROLEUM CORPORATION LTD Versus COMMISSIONER OF CENTRAL EXCISE 2014 (2) TMI 324 - CESTAT MUMBAI . Accordingly N/N. 64/95-CE is not available to the appellants. The matter needs to be remanded only for re-quantification on the basis of the evidence to be produced by the appellant before the adjudicating authority - As regards the penalty the issue involved is purely on interpretation of N/N. 64/95-CE thus the penalty set aside. Appeal allowed in part and part matter on remand.

Summary

Issues:
Interpretation of Notification No.64/95-CE for duty exemption on High Speed Diesel (HSD) supplied to foreign going vessels; Re-quantification of duty demand based on evidence of duty-free clearance; Imposition of penalty on the appellant for interpretation of notification.

Analysis:

Interpretation of Notification No.64/95-CE for duty exemption on HSD supplied to foreign going vessels:
The case involved the appellant, a refinery manufacturing High Speed Diesel (HSD) under Chapter heading 27.10 of the CETA, clearing goods at nil rate of duty as per Notification No.64/95-CE. The department contended that the exemption was for goods supplied to Indian Navy/Coast Guard, not Indian Oil Corporation. The appellant argued that a substantial quantity of HSD was supplied for consumption on foreign going vessels, qualifying for duty exemption as per Circular No.605/42/2001. The Tribunal found that the issue was previously decided against the appellants and remanded the matter for re-quantification based on evidence of duty-free clearance to foreign going vessels.

Re-quantification of duty demand based on evidence of duty-free clearance:
The Tribunal noted that the appellant submitted a certificate from Indian Oil Corporation indicating duty-free supply to foreign going vessels, but failed to produce this evidence during adjudication. Consequently, the matter was remanded to the original adjudicating authority for re-quantification based on satisfactory evidence provided by the appellant regarding duty-free clearance to foreign going vessels.

Imposition of penalty on the appellant for interpretation of notification:
Regarding the penalty, the Tribunal agreed with the appellant that the issue revolved around the interpretation of Notification No.64/95-CE, which was settled by the Supreme Court in a previous case where penalties were set aside. Considering this, the Tribunal concluded that no penalty was imposable in the present case and set aside the penalties imposed on the appellant.

In conclusion, the Tribunal remanded the matter for re-quantification of duty based on satisfactory evidence of duty-free clearance to foreign going vessels and set aside the penalties imposed on the appellant due to the interpretation of the notification.