Divergence among the Central Excise Collectorates in the matter of condonation of storage and handling losses of petroleum products in a refinery and in the method of determining the Quantities of petroleum products for the purpose of accountal in statutory Central Excise records - Central Excise - 55/89-CX.8

Divergence among the Central Excise Collectorates in the matter of condonation of storage and handling losses of petroleum products in a refinery and in the method of determining the Quantities of petroleum products for the purpose of accountal in statutory Central Excise records Circular No. 55/89-CX.8 Dated 15-12-1989 [From F. No. 261/27/9/89-CX.8] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Divergence among the Central Excise Collectorates in the matter of condonation of storage and handling losses of petroleum products in a refinery and in the method of determining the Quantities of petroleum products for the purpose of accountal in statutory Central Excise records. It has come to the notice of the Board that there is divergent practice among the various Central Excise Collectorates in the matter of condonation of storage and handling losses of petroleum products occurring in a refinery and also in the method of determining the quantities of such losses. 2. The matter has been examined by the Board. It is seen that vide Board's letters F. No. 261/11-A/2/76-CX.8, dated 13-12-1976 and F. No. 8/82/65-CX.3, dated 22-4-1968, it was clarified that all tanks for storage of bulk oil in the refineries as well as marketing installations must be measured both before and after each operation of either receipt into or discharge of oil from the tanks. The difference noticed in the dip readings measured between two operations should constitute the storage loss. 3. The handling losses on the other hand would mean those losses which takes place in the course of discharge of petroleum products from the storage tank into the tank wagon/tank lorry. For the purpose of accountal in RG. 1, quantity determined on the basis of difference of dip of the storage tank taken before and after discharge of petroleum products should be taken as the quantity removed. For the purpose of accountal in AR 3As and GP1s or GP2s or other clearance documents, quantity determined on the basis of difference of dip of the tank wagon/Tank lorry taken before and after filling should be taken as quantity cleared. The difference between the two quantities mentioned above should represent handling loss. 4. The storage losses and handling losses should be taken up for condonation on accumulative basis monthwise as per the guidelines prescribed in Board's F. No. 26/23/EXM/54, dated 1-6-1956 and F. No. 9/17/57-CX.2, dated 2-3-1959 as may be seen in para 69 of Petroleum Products Manual (corrected up to 31-1-1985). The method of determining storage losses and handling losses mentioned above should henceforth be strictly followed by all