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2019 (10) TMI 409 - AT - Central ExciseBenefit of N/N. 12/2012 - production and distribution of HSD/MS and SKO to various oil companies like IOCL HPCL BPCL etc. - Department has issued a SCN claiming that such SKO which has been used as interface was cleared with an intention to be distributed through Public Distribution System - CBEC Circular No. 636/27/2002-CX dated 22.04.2002 - HELD THAT - The issue decided in the case of M/S MANGALORE REFINERY AND PETROCHEMICALS LTD SHRI. VK JAIN GENERAL MANAGER HPCL TAX AND HINDUSTAN PETROLEUM VERSUS C.C.E. S.T. -MANGALORE 2019 (7) TMI 165 - CESTAT BANGALORE where it was held that What has been cleared by the appellants at the factory is undisputedly SKO for use in PDS system. If some quantity of the SKO is not used for the intended purposes after clearance duty cannot be demanded from the appellants. Appeal allowed - decided in favor of appellant.
Issues: Early Hearing Request, Interpretation of Notification No. 12/2012 and CBEC Circular No. 636/27/2002-CX, Eligibility for Public Distribution System (PDS) exemption.
Early Hearing Request: The appellants sought an Early Hearing of the case, citing a previous Tribunal decision in their favor for an earlier period. Both the appellants and the Learned AR had no objection to the case being taken for final hearing. The Tribunal considered the request and proceeded with the hearing. Interpretation of Notification No. 12/2012 and CBEC Circular No. 636/27/2002-CX: The Department issued a Show Cause Notice (SCN) claiming that SKO used as an interface for cleaning pipelines was intended for distribution through the Public Distribution System (PDS). The Department contended that the exemption under Notification No. 12/2012 and CBEC Circular No. 636/27/2002-CX did not apply as the SKO was not used for its intended purpose. The Commissioner confirmed this claim in an Order dated 30.08.2018. Eligibility for Public Distribution System (PDS) exemption: The appellants argued that the issue had already been decided in their favor by the Tribunal in a previous order dated 02.07.2019. They emphasized that the eligibility for the Notification is based on intent rather than actual use, as the Notification states "intended for sale" through PDS. The Tribunal, considering previous similar cases, allowed the appeal of the appellants. The appellants highlighted a slight distinction in their case where SKO was cleared at the full rate of duty applicable to non-PDS SKO, which the Commissioner acknowledged in the adjudication order. Decision: After hearing both sides and reviewing the records, the Tribunal found that the issue was no longer res integra following the earlier decision by the Bench and other relevant cases. Consequently, the Tribunal allowed the appeal of the appellant. The Order was pronounced and dictated in Open Court on 18/09/2019.
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