2014 (6) TMI 618 - AT - Central Excise

Duty demand - Difference in loss - appellant is receiving lubricating oil from M/s. IOBL Kolkata either on payment of duty or without payment of duty under bond - assessee were repacking the same into small packs to be sold in the market under their own brand and style - Held that - Admittedly the duty is being demanded in respect of difference on account of loss or shortage which was allowed under Standards Weights and Measures (Packaged Commodities) Rules 1977 as also in terms of Input-Output Norms declared under Exim Policy 2002-2007. There is no evidence on record to show that such shortage/wastage was used by the appellant in the manufacture of final products and stands cleared by the appellant without payment of duty - Decided against Revenue.

Summary

Issues:
Dispute over the quantity of lubricating oil not accounted for in the final products.

Analysis:
The case involved an appeal by the Revenue against an order passed by the Commissioner (Appeals) regarding the quantity of lubricating oil received by the appellant from M/s. IOBL, Kolkata. The appellant repackaged the oil into small packs under their brand for sale. The Revenue claimed that a certain quantity of oil was not properly accounted for in the final products. The original adjudicating authority confirmed the demand, but the Commissioner (Appeals) set it aside, noting that the difference in quantity was within the tolerance range allowed by regulations. The Commissioner also highlighted the lack of evidence for clandestine activities, stating that no duty could be demanded on the waste or loss without such evidence.

Upon examining the submissions from both parties, the Tribunal found no merit in the Revenue's appeal. The duty was being demanded based on the difference in quantity due to loss or shortage, which was within the permissible limits set by regulations and policies. There was no evidence to suggest that the unaccounted quantity was used in the manufacture of final products without duty payment. Consequently, the Tribunal upheld the Commissioner's decision, rejecting the Revenue's appeal.