1999 (2) TMI 184 - AT - Central Excise

Demand for duty on mineral oil removed from refinery but not warehoused at other bonded installations

Summary

Issues:
Quantities of high speed diesel oil (H.S.D) removed without payment of duty for transportation to other warehouses and discrepancies in accounting for the same.

Analysis:
In this case, the appellant, a manufacturer of petroleum products, was involved in the distribution of high speed diesel oil (H.S.D) from its warehouse in Mumbai to other warehouses. The dispute arose when the appellant was asked to explain the quantities of goods removed from its Mumbai warehouse without duty payment for transportation to other locations, which were not adequately explained as received in those warehouses. The appellant argued that discrepancies in quantities occurred due to the movement of H.S.D being controlled by the Oil Co-ordination Committee of the Government of India, leading to frequent amendments in the required documents. The appellant contended that the shortage in accounted quantities amounted to 400.334 kilo litres (K.L) for the period in question, which they believed could be reconciled by considering revised documents.

The departmental representative pointed out discrepancies in the accounting, highlighting that even after considering revised documents, a quantity of 92.126 K.L remained unaccounted for. The appellant referred to a letter indicating a different unaccounted quantity at another location, but this explanation did not fully address the discrepancies. The tribunal found the appellant's explanations unconvincing, especially regarding discrepancies between documented quantities and actual transportations. Despite acknowledging the challenges faced by the appellant in controlling the distribution of mineral oil products, the tribunal emphasized the importance of maintaining proper accounts and timely document submissions. Ultimately, the tribunal was not satisfied with the explanations provided by the appellant and declined to interfere, dismissing the appeal.

In conclusion, the judgment underscores the significance of accurate accounting and documentation in cases involving the transportation and distribution of goods, even when external factors may impact the process. The tribunal's decision to dismiss the appeal highlights the importance of maintaining transparency and accountability in such transactions to avoid discrepancies and ensure compliance with legal requirements.