2014 (12) TMI 278 - AT - Central Excise

Clearance of petroleum products without payment of duty under cover of ARE-3 Certificates from their factory for the purpose of export warehousing, without coverage of any CT-2 or CT-3 Certificates - Contravention of the provisions of Rule 20 of Central Excise Rules, 2002, read with CBEC Circular Nos.581/18/2001-CX dated 29.06.2001 and 579/16/2001-CX dated 26.06.2001 and Para 4.1 of Part I of Chapter 10 of the CBEC s Excise Manual - Intention to evade duty - Held that - It is the claim of the Appellant that even though they are not required to place such evidences in view of the Notification No.37/2007-CE dated 01.11.2007, which rests on their marketing division, however, now, they have procured the necessary Certificates from their marketing division to show the goods cleared by them against indents issued by the Marketing Division, were, in fact, consumed on board of a vessel of Indian Navy/Coast Guard. Regarding the other issues, we find that the Appellant had submitted before the adjudicating authority that in view of the various CBEC s Circulars issued from time to time, the transit losses up to 1% could be condoned, which has not been dealt with by the adjudicating authority in the impugned order. We find from the record that the Appellant had discharged duty against shortages in excess of condonable limit and also paid interest on this count - matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Duty demand on short receipt of petroleum products at consignee's end.
2. Duty demand on goods cleared at nil rate of duty under exemption Notification.
3. Condonation of transit losses during transportation.
4. Confirmation of duty against clearances to Indian Navy availing exemption Notification.
5. Examination of evidences regarding consumption of petroleum products on vessels of Indian Navy/Coast Guard.
6. Appellant's submission on transit losses condonation not addressed by adjudicating authority.
7. Remanding the case for fresh examination by the Commissioner.

Analysis:
1. The appeal was filed against the Order-in-Original dated 30th March, 2012, alleging contravention of Central Excise Rules. The Appellant, an oil corporation, was accused of clearing petroleum products without duty payment for export warehousing. The duty demanded was reduced during adjudication, but a penalty was imposed under Section 11AC of the Central Excise Act, 1944.

2. The Appellant contested the demand of duty due to short receipt of products at the consignee's end and goods cleared at nil duty rate under an exemption Notification. They argued for condonation of transit losses and presented evidence of duty payment on shortages exceeding the condonable limit.

3. The Appellant's representative highlighted the amendment in Notification No.37/2007-CE regarding duty payment for goods supplied to Indian Navy and Coast Guard. They clarified that the responsibility for accountal lies with the marketing locations and submitted evidence of supplies to the Navy and Coast Guard.

4. The Department's representative acknowledged the lack of evidence on the consumption of petroleum products on naval vessels. They agreed to remand the case for a fresh decision by the Commissioner considering the new evidence provided by the Appellant.

5. The Tribunal found that the demand related to clearances for naval consumption lacked evidence. The Appellant procured certificates from their marketing division to prove the products were used on vessels. The issue of transit losses condonation up to 1% as per CBEC Circulars was not addressed by the adjudicating authority.

6. The Tribunal set aside the impugned order and remitted the matter to the Commissioner for a fresh examination of all issues. Both parties were given the opportunity to present evidence, and the case was allowed by way of remand.

7. The judgment emphasized a fair examination of evidence and issues by the Commissioner, ensuring justice and proper consideration of all aspects. The appeal was allowed for a reevaluation of the case.