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2023 (3) TMI 832 - AT - Central ExciseRefund of duty paid - remission of duty - shortage in quantity or not - rejection of refund claim on the ground that the word whatsoever in condition 2(v) of the Commissioner s letter dated 03.10.2018 was much enough to cover the expansion and contraction of the hydrocarbon fuels which was natural/scientific phenomenon - the plea of the appellant is that there is no difference in the overall quantity difference which was pointed out by the department is not of the physical shortage but due to contraction in the goods which occurs due to difference in the temperature. HELD THAT - From the reading of the Circular No.778/11/2004-CX dated 11.03.2004 and Circular No. 367/83/97-CX dated 19.12.1997, though it is not directly on the fact in the present case but it establishes that due to temperature variation, the petroleum product gets contracted and due to which there is variation in the quantity of the same quantum of the goods between one temperature and other temperature therefore, the fact that the petroleum product gets contracted is not under dispute. In the present case, it is admitted fact the weight of the product remains unchanged or very minor difference as compared to the difference shown in K15 and KL of a liquid product which obviously varies at a time of a particular temperature and at different time at a different temperature, the appellant have also shown that the temperature at the time of loading and unloading where different - there is shortage of quantity in KL whereas, quantity in MT is almost same except the variation in 0.847 MT as against the total weight of 64030.568 MT which is negligible. As per the above table, it can be seen that when the total quantity of goods in weight is same and the quantity in KL varies at different time due to different temperature, there is absolutely no case of shortage or loss of the goods. Thus, it is clear that if there is physical loss due to handling, transit, storage or in case of accident or natural calamity or whatsoever, no remission shall be permitted. In the present case, as discussed above the quantity of goods in weight stand intact therefore, in fact there is no loss of the goods, para 2(v) shall apply only in a case where there is actual loss in the quantity. In the present case, the quantity remains the same, the variation in KL is only due to density of the goods that due to different temperature at the time of loading and unloading therefore, it cannot be said that there is any loss of quantity of the goods consequently, there is no violation of para 2(v) of the Commissioner s letter dated 03.10.2018. Remission of duty - HELD THAT - This will come into picture only when there is actual loss and appellant seeks remission of duty - In the present case since there is no loss at all, there is no question of seeking remission therefore, the process of remission of duty is not relevant in the present case. Since there is no loss of the goods at loading and unloading as stage, no duty demand is sustainable accordingly, the duty so paid by the appellant is required to be refunded to the appellant. Unjust enrichment - HELD THAT - The appellant have accepted that the amount of refund shown as received in their books of accounts therefore, they have satisfied that the incidence of refund amount has not been passed on to any other person. Appeal allowed.
Issues involved:
The issue involves the interpretation of para 2(v) of the Commissioner's letter dated 03.10.2018 regarding remission of duty against loss of goods during handling, transit, storage, or in case of accidents or natural calamities. The main question is whether the difference in quantity of High Speed Diesel (HSD) between loading and unloading was due to actual loss or contraction caused by temperature variation. Summary: The appellant, owning a refinery in Gujarat, stored HSD outside the refinery premises under permission from the Commissioner. A difference in quantity of HSD between loading and unloading was noted, attributed by the appellant to contraction due to temperature variation, not actual loss. The appellant paid excise duty on the difference and sought a refund, which was rejected based on para 2(v) of the Commissioner's letter. The Assistant Commissioner upheld the rejection, stating the word 'whatsoever' in the condition covered natural phenomena. The appellant appealed, arguing no actual loss occurred, citing relevant circulars and judgments. The appellant contended that the quantity difference was due to contraction, a normal phenomenon for petroleum products supported by circulars. The revenue emphasized the shortage between loaded and unloaded HSD, citing para 2(v) of the Commissioner's order. The Member (Judicial) considered the nature of petroleum products and temperature variation, noting the negligible difference in weight despite the quantity variance in KL. It was observed that para 2(v) applied to actual loss, which was not the case here. As there was no loss, remission of duty was deemed irrelevant, and the duty paid was ordered to be refunded. The appellant's assertion of no unjust enrichment was accepted, leading to the allowance of the appeal. Separate Judgement: No separate judgment was delivered by the judges in this case.
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