2003 (11) TMI 140 - AT - Central Excise

Summary

Issues:
1. Interpretation of the term 'migration' in the context of Central Excise Rules.
2. Obligation of the appellant to pay duty on excisable goods.
3. Compliance with Rule 143A of Central Excise Rules.
4. Time-barred demand for duty.

Interpretation of the term 'migration':
The appeals involved a common issue regarding the term 'migration' used by the appellants in their statutory documents. The Central Excise Officers found quantities of excisable goods not accounted for due to this term. The appellants explained 'migration' as the transfer of products between storage tanks due to interconnections, with no revenue loss as the quantities were accounted for in different tanks. The Commissioner confirmed a duty demand of Rs. 14,18,796.39, citing non-compliance with Rule 143A in managing the migrated petroleum products.

Obligation to pay duty on excisable goods:
The Commissioner held that the appellants, despite reflecting migration in their records, failed to account for excisable goods properly, leading to duty liability. The Commissioner emphasized the legal obligation to account for goods without payment of duty and follow prescribed procedures. The appellants' failure to comply with Rule 143A and lack of written clarification on 'migration' led to the duty demand enforcement for a specific period.

Compliance with Rule 143A of Central Excise Rules:
The Commissioner highlighted the appellants' non-compliance with Rule 143A, which allows blending or further manufacturing processes under specific conditions. The failure to follow this rule in the alleged migration of petroleum products between storage tanks resulted in the duty demand confirmation, as per the Commissioner's observations.

Time-barred demand for duty:
The appellants contested the duty demand on the grounds of time-bar, double duty payment risk, and practical difficulties due to valve leakage. The Deputy Manager for the appellants argued that 'migration' indicated a transfer between tanks, not a removal without duty payment. The Tribunal, after reviewing submissions and the impugned order, found no evidence of clandestine removal by the appellants. Consequently, the duty demand was set aside, and the appeal was allowed in favor of the appellants, granting them consequential relief.