2012 (4) TMI 163 - AT - Central Excise

Appellant engaged in the manufacture of Low Viscosity Furnace Oil (LVFO) kept in their Bonded Warehouse from there, it was transferred to the other Bonded Warehouse without payment of duty - Appellant claimed the benefit of Notification No.29/02-CE which exempts 50% of the duty in case of the goods manufactured at 4 refineries situated in the North-Eastern Part of the country revenue denied the grant of benefit in lieu of notification as they were not directly paying duty at the time of initial clearances from their Bonded Warehouse - Held that - notification as amended is to the effect that petroleum products cleared under bond from any of the specified refineries and received under bond in a warehouse can be cleared on payment of duty at the concessional rate specified in the notification - nothing in the Notification to deny the exemption if the goods are received under bond in one or more warehouse before they were received in Budge Warehouse. Accordingly we set aside the impugned order and allow the Appeal with consequential relief to the Appellants

Summary

Issues:
Appeal against Order-in-Original confirming duty demand, penalty imposition, denial of Notification benefit.

Analysis:
The Appellant, engaged in manufacturing Low Viscosity Furnace Oil (LVFO), appealed against Order-in-Original confirming duty demand of Rs.51,06,512/-, interest, and penalty under Section 11AC of the Central Excise Act 1944. They claimed the benefit of Notification No.29/02-CE exempting 50% duty for goods manufactured at specific refineries in the North-Eastern region. The dispute arose as duty wasn't paid during initial clearances from Bonded Warehouse to Siliguri. The Appellant argued for exemption based on a previous Tribunal order in their favor on a similar issue. The Revenue, through the AR, supported the lower Adjudicating Authority's findings.

The Tribunal referred to its earlier decision dated 14.09.11, where it held that exemption under the notification is available even when goods are cleared from a bonded warehouse without direct receipt from the refinery. The Tribunal analyzed the relevant Notification No.29/2002 and the subsequent amendment through Notification No.34/2002, emphasizing that goods cleared under bond from specified refineries and received under bond in a warehouse can be cleared at a concessional rate upon payment of duty. The Tribunal concluded that the demand raised due to goods not being directly received from the refinery under bond was unsustainable. It further clarified that the exemption is applicable even if goods are received in multiple warehouses before reaching the final warehouse for duty payment. Consequently, the impugned order was set aside, and the Appeal was allowed with consequential relief to the Appellants.

In summary, the Appellant's appeal against the duty demand, interest, and penalty imposition was successful as the Tribunal ruled in their favor based on the interpretation of the relevant notifications and the precedent set by a previous decision. The Tribunal emphasized the availability of exemption even when goods are cleared from bonded warehouses without direct receipt from the refinery, ultimately providing relief to the Appellants in this case.