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TMI Blog2010 (4) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... he transaction value/price available in the normal course of clearances affected on each date. The lower authorities were of the view that the appellant is liable to discharge the duty liability on the stocks in the warehouses as on 5/6-9-2004 issued show cause notices treating the entire stock as being cleared on 5-9-2004 and not datewise. The appellant contested the show cause notice before the Adjudicating Authority relying upon various case-laws. The Adjudicating Authority after granting an personal hearing to the appellant came to the conclusion that the duty liability on the stocks which are in the warehouses as on 5/6-9-2004 has to be done on 5/6-9-2004 and transaction value for the clearances made on the stock will not be applicable. Coming to such a conclusion, he confirmed demand of duty, imposed penalty and also demanded interest. 3. Learned Counsel appearing on behalf of the appellant would submit as under : DUTY RIGHTLY PAID ON THE TRANSACTION VALUE - ISSUE SETTLED BY CIRCULAR DATED 4-9-2004 3.1 It is submitted that Notification No. 17/2004-CE (NT) dated 4-9-2004 amended Notification No. 47/2001-CE (NT) dated 26-6-2001 withdrawing the warehousing facility extended f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods dutiable. Neither the Notification withdrawing the facility of warehousing nor the Circular dated 4-9-2004 provided anywhere that the price which should be taken for payment of duty should be the price prevailing on 5-9-2004. IDENTICAL ISSUE DECIDED IN FAVOUR OF THE ASSESSEE 3.7 The Appellants submit that an identical issue was raised in respect of their Vizag terminal in Commissioner of Central Excise (Appeals), Vizag vide Order-in-Appeal dated 18-10-2008. In the Order-in-Appeal, the Commissioner (Appeals) has referred to several decisions of the authorities and dropped the proceedings. 3.8 It is submitted that in the case of IOCL vide Order dated 9-1-2006 the Commissioner dropped the proceedings against IOCL. It is understood that no appeal has been filed against the said Order. 3.9 It is submitted that similar issue in respect of warehoused goods has been decided in the case of BPCL by the Tribunal vide decision reported in 2007 (219) E.L.T. 191 (Tri-Bang.). This has been confirmed by the High Court of Karnataka vide Order dated 29-10-2007 [2010 (250) E.L.T. 24 (Kar.)]. SUBSEQUENT AMENDMENT TO THE NOTIFICATION WOULD NOT TAKE AWAY THE RIGHT ALREADY ACCRUED UNDER T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following findings : "I find that the Board's circular dated 4-9-04 and 4-1-05 clarify that since no stocks on or after 6th Sept., 04 can remain bonded/warehouses, duty is liable to be paid on the stocks of petroleum products lying in the bonded warehouses on the midnight of 5/6-9-2004, and the bonded/warehoused goods are to be treated as cleared immediately. Provision was however, made to discharge the duty under provisions of Rule 8 of the Central Excise Rules, 2002, i.e. by 5-10-04. Thus I find that for payment of duty on the stocks lying and treated as cleared on 6-9-04, the value should be the transaction value prevalent on the same date, though the goods were sold subsequently. I find that the assessee cleared the goods by adopting the transaction value in the normal course of clearances affected on each date up to 30-9-2004. The duty on the goods cleared to dealers on 10-9-2004 was paid based on the dealer price of the goods available on 10-9-2004 and like wise up to 30-9-2004, which is not correct. The transaction value for the balance stocks as on 5/6-9-2004 should have been the price prevalent on that date only but not otherwise." 6.1 It can be noticed from the above re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essable value of the petroleum products cleared from refinery on or after 6-9-2004 is to be determined under Section 4 of the Central Excise Act read with Valuation Rules. We fail to understand, why these provisions cannot be applied to the stocks cleared from warehouses on or after 6-9-2004 when the warehousing facility has been withdrawn. The assessable value of the goods should be based upon the transaction value is accepted fact in the entire case. If that be so, since the goods were removed from refinery without payment of duty, the first sale transaction took place in the warehouses on or after 6-9-2004 and in our considered view, the provisions of Section 4 will be applicable to all the transactions and the discharge of duty liability will be based upon the transaction value of such clearances. 7. We find that the CBEC vide their Circular No. 804/1/2005 dated 4-1-2005, on receipt of various representations from the oil companies and various field formations clarified as under : (i) Issue : The Oil companies, due to logistical reasons, cannot supply the petroleum products under end-use based exemptions (including the supplies of petroleum products to vessels of Indian Navy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irports normally cater to domestic as well as international flights and the supplies of ATF (Aviation Turbine Fuel) to foreign-going aircrafts cannot be made directly from the refinery. Further, they have reported difficulties in installing multiple storage tanks (separate for domestic and export clearances) at the site of the airport due to space constraints. Similar problem has also been reported for supply of Bunker Fuel (FO/LDO/HSD) to foreign-going vessels and coastal vessels. Decision: In such cases, ATF cleared for export warehouse may be allowed to be stored in the intermediate storage tanks subject to condition that such intermediate storage tanks are used exclusively for storing export goods. The details of such intermediate storage tanks including their physical location in the concerned installation should be intimated to jurisdictional Central Excise officer. Accordingly, para 6.1 in Circular No. 581/18/2001-CX., dated 29th June, 2001 issued for export warehousing is modified as below :- Receipt of goods will be governed by the procedure specified under "6.1 Circular No. 579/16/2001-CX., dated 26th June, 2001 [2001 (131) E.L.T. T25] issued under Rule 20 with the modi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eared immediately after 5th/6th September, 2004) could be discharged in terms of provisions of Rule 8 of Central Excise Rules, 2002 i.e. by 5th October, 2004." 7.1 It can be seen from the above reproduced Circular that the duty liability on the goods in the warehouses after the withdrawal of warehousing facility could be discharged in terms of provisions of Rule 8 of the Central Excise Rules, 2002 could indicate that duty liability can be paid by the appellant on 5th of the following month. Such determination of the duty can arise only when the goods are cleared from the warehouses. We also find that in the appellant's own case in respect of other Commissionerates i.e. Guntur, Hyderabad-III and Visakhapatnam, the Revenue authorities have been taking a similar view. It was submitted by the learned Counsel that the said orders are not appealed by the Revenue and has been accepted by them. Learned Counsel would also rely upon the various other orders passed by other Commissionerates in respect of other oil companies in an identical situation, accepting the transaction value of the warehoused goods cleared during the period 6-9-2004 to 30-9-2004. On perusal of the said orders, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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