9911796707
Advanced Search 
TMI Blog2012 (9) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 and accordingly, rebate of duty paid thereon is admissible. They purchase duty paid furnace oil from M/s. Bharat Petroleum Corporation Ltd. (BPCL) and supplied the same to various foreign going vessels at Mumbai Port. The furnace oil manufactured by BPCL at their Mahul Refinery is cleared on payment of duty to their Sewree Terminal registered with Central Excise Department as a First Stage Dealer. They purchase duty paid furnace oil from BPCL's Sewree Terminal who issue their Central Excise Invoices, evidencing payment of duty. It has been stated that the furnace oil is moved directly from BPCL's refinery at Mahul to the port of exportation for supply to the foreign going vessels/ships in 5 cases out of total 55 cases. In remaining 50 cases, the furnace oil was procured from M/s. BPCL-Sewree Terminal. The said furnace oil was supplied by BPCL, Sewree in tanker-lorries and such supplies were also made directly from BPCL-Sewree to a foreign going vessel, through Mallet Bunker, Mumbai Docks, under the cover of ARE-1, Central excise Invoices and other export documents. The duty on said furnace oil was claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade etc. has to apply for and obtain registration with the Central Excise Department. (iii) As per Notification 35/2001-C.E. (N.T.), dated 26-6-2001 [para (1)] every person specified under Rule 9(1) is required to apply for registration in the prescribed form and obtain registration, unless exempted from registration by C.B.E. & C., under Rule 9 of Central Excise Rules. (iv) As per para 1(iv) of Notification No. 36/2001-C.E. (N.T.), dated 26-6-2001, the person who carried on wholesale trade or deals in excisable goods, except first stage dealer or second stage dealer, as defined in Cenvat Credit Rules, Is exempted from registration. With this, first stage dealer and second stage dealer are required to hold registration. In view of above, BPCL-Sewree being first stage dealer is required to hold registration under Rule 9 of Central Excise Rules, 2002 and are holding registration. 3.4 BPCL, from whom furnace oil was purchased by the applicants, are holding registration with the Central Excise Department, under Rule 9(1) of Central Excise Rules, 2002 for their Sewree Installation as first stage dealer. The furnace oil purchased from BPCL's warehouse at Sewree, hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further Bunker Delivery Note conclusively evidences receipt of the furnace oil by master/Chief Engineer of the ship. Hence, the findings of the lower authorities of non-linkage of the goods from the point of refinery till to the point of supply to ship as also non-supply directly from warehouse are factually as well as legally incorrect. 3.9 That the main ground based on which the refund claim has been rejected by the lower authorities is that the goods were not cleared from the factory or warehouse directly to the port of export, but cleared to BPCL-Sewree Terminal, wherefrom the applicants purchased specified quantity and exported. In other words, since the goods have not been moved directly from the refinery to port of export, identity of the goods cleared from the refinery and those exported cannot be co-related and, hence, the relaxation extended under C.B.E. & C. Circular No. 294/10/97-CX., dated 30-1-1997 is not applicable to the present case. In this context, the applicant say that the provisions of said C.B.E. & C. Circular does not apply to the present case, as said circular was issued clarifying the position under Notifications Nos. 41/94-C.E. (N.T.) & 44/94-C.E. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st-out) method. The only possible co-relation of the duty paid furnace oil and furnace oil exported is matching the quantity of the same and other collateral evidences like tanker lorry registration number etc. Further samples of furnace oil were also drawn at BPCL-Sewree Terminal and one sample each is retained by BPCL, the applicant Customs Officer and the Master of Vessel. From this also, the product is identifiable and corelatable. 3.12 In view of above submissions, the observations of the Commissioner (Appeals) that excisable goods shall be exported directly from a factory or warehouse, except otherwise permitted by C.B.E. & C. in special or general order, that the applicants purchased furnace oil from BPCL-Sewree Terminal, which is not a factory, that the goods were not cleared for export directly from the factory, C.B.E. & C. relaxed conditions of clearance for direct export under Circular dated 30-1-1997, however, said circular is applicable if identity of the goods can be corelated, that C.B.E. & C. Circular dated 30-1-1997 is applicable to Notification 19/2004-C.E. (N.T.), as Notification No. 41/94-C.E. (N.T.) had an identical condition of direct export from factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder self-sealing the supervisions was not conducted hence the co-relation was not established. The condition of direct export from the factory is waived subject to condition that the exporter desiring the export duty paid excisable goods (capable of being clearly identified) which are in original factory packed condition should make an application in writing to jurisdictional superintendent of Central Excise and the Central Excise Officer, on verification, is satisfied about the identity of goods, duty paid character and the duty payment is got verified from the originating Range where the duty was paid. The applicants did not comply with the aforesaid conditions. The identity of the goods cannot be possibly verified after they have been cleared for export. 4.3 It is contended that there was only procedural lapse and the substantive right of rebate should not be denied for the said lapse. It has been held by the Hon'ble Supreme Court in Indian Aluminum Company Ltd. v. Thane Municipal Corporation - 1991 (55) E.L.T. 454 (S.C.) that non-observance of even a procedural condition is not to be condoned. If it is likely to facilitate commission of fraud and introduce administrative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. BPCL is not applicable in their case as in that case goods of BPCL & HPCL were stored in same tank. The storage tanks were also not registered under Rule 9. In the present case, the Sewree Terminal of BPCL registered with reference to stored goods of BPCL only. * Assistant Commissioner Central Excise Mumbai-I vide order-in-original No. 2l/R/10 as Maritime Commissioner, allowed the similar rebate claim of the applicant party. * BPCL Sewree Terminal warehouse has issued Central Excise Invoice under Rule 11(7) against which applicant has made payment for value and duty amount. Initially the duty is paid by manufacturer BPCL Refinery Mumbai. The Central Excise Invoice No. of Refinery is figuring in the ARE-I Destination - vessel name is given on both ARE-I & Invoice. ARE-I contains the shipping bill No. under which goods were exported. The Shipping Bill No. mentioned in the Customs endorsement. * The office-inspector of MPT has given a certificate in each case regarding confirmation of Tanks received for Bunker supply to vessels. 5.1 Applicant in his written sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamined by the customs officers at the port and the entire operation of supply of furnace oil to the FOREIGN GOING vessels at the port was carried out under the supervision of the jurisdictional Customs Officers who have also signed on Part-B of each ARE-1 which was not done in the said case. 5.1.4 The detailed Order No. 21/R/2010, dated 30-4-2010 passed by the Asstt. Commissioner, Mumbai-I sanctioning the Applicant's 3 identical claims has been accepted by the department and no appeal has been filed. Having accepted that order, the department cannot take a different stand for these cases. 5.1.5 There is only one procedural lapse that the ARE-1s were not signed by the jurisdictional Central Excise Officers and the Triplicate copies thereof were not sent in sealed cover to the Division Office. The main reason for this condition is to ensure that the duty was paid on export goods and this fact is not disputed by either of the 2 lower authorities. To the best of our knowledge, the jurisdictional Division's Asstt. Commissioner had got the verification of the duty payment done from the concerned Range Officer before passing the order. In any case this aspect can be verified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 6 above. 8. Applicant has contended that clearance of furnace oil in respect of following ARE-1 was made direct from factory i.e. M/s. BPCL Mahul Refinery Mumbai. Sl. No. ARE-I No. 1. VIPL/019/07-08/14-1-2008 2. VIPL/020/07-08/25-1-2008 3. VIPL/021/07-08/1-2-2008 4. VIPL/005/08-09/23-7-2008 5. VIPL/008/08-09/26-5-2008 Department had objected to rebate claim in ARE-1s pertaining to clearance of furnace oil from M/s. BPCL-sewree Terminal. Since in all these five cases (ARE-1s) the clearance was made direct from factory - M/s. BPCL Refinery Mahul, under proper Central Excise Invoice, so there cannot be any objection in sanctioning these rebate claims. Government directs that these five rebate claims may be sanctioned if otherwise found in order since the objections raised by department do not pertain to these ARE-1s. 9. As regards other 50 rebate claims pertaining to other ARE-1s where clearance has taken place from M/s. BPCL-Sewree Terminal. Commissioner (Appeals) has upheld the impugned Order-in-Original on the ground that "the condition of direct export from the factory is waived subject the condition that the ixporter desiring to export duty paid exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kes up the ground of rejection as mentioned at 2 above for consideration of the case matter. Now, while keeping all the above submissions of the applicant in background, Government notes that the lower authorities has rejected the rebate claims on the core reason that the applicant did not submit/get endorsed the triplicate copy of the ARE-1s to/from the jurisdictional Range Superintendent of Central Excise so as to certify the duty paid nature and corelatable status of the export goods (furnace oil) as the goods were not cleared directly from the factory of manufacturer and goods were not examined by the Central Excise officer as required. Thus contravening the conditions discussed elaborately till this stage of the case matter. 9.3 The applicant has submitted the detailed chart as stated in para 6.1.1 above, along relevant document to establish that there is a perfect correlation between the goods cleared from factory and goods finally exported. In this regard, it is observed that in all the Central Excise Invoices, issued by M/s. BPCL Sewree Terminal, particulars like name of the Foreign Going (FG) vessel to which furnace oil (FO) was supplied, Central Excise Registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculars of export. In the instant case, the goods have been examined by the Customs at the Place of export of port as per provision of paras 7.3 and 7.4 of the Chapter 8 as enumerated above. The Customs Officer has duly endorsed the original and duplicate copy of the ARE-1s, after satisfying himself about the fact that the goods intended for export are the same which were cleared on the relevant ARE-1s. The relevant Shipping Bill No. against which goods were exported was also mentioned in the Customs endorsement on each ARE-I Part-B. 9.5 The above stated factual position is not disputed by department keeping in view all the documentary evidence and particulars/details stated therein especially ARE-I, Central Excise Invoice, Shipping Bill, and Bunker delivery note and the Customs Certification in the Part-B of ARE-I clearly establish that the furnace oil cleared from the BPCL-Sewree Terminal was ultimately exported. 9.6 The applicant reiterated that the Order Nos. 204-205/09 of the Government of India which has been relied upon by the Ld. Commissioner of Central Excise (Appeals) is not at all relevant for this case as in that case the material of BPCL and HPCL was store ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Central Excise Mumbai-I vide order-in-original No. 21/R/10, dated 30-4-2010. The order was accepted by department. In the said order Asstt. Commissioner Central Excise has accepted the duty paid nature of goods exported which got co-related with the goods cleared from factory/warehouse Terminal through the collateral evidences. The sanction of these rebate claims in fact also strengthen their case. 9.9 Regarding certification of duty payment on the goods, Government notes the furnace oil cleared on payment of duty on Central Excise Invoices by M/s. BPCL Refinery Mahul and stored in their own installation BPCL Sewree Terminal whose Central Excise Invoice contain the reference of corresponding Central Excise Invoice issued by BPCL Refinery. The Asstt. Commissioner Central Excise has mentioned that the applicant had received said goods from M/s. BPCL Sewree Terminal and duty of said goods was originally paid by M/s. BPCL (Refinery) Mahul. This factual position as stated in the order-in-original is not denied by the department. Further, M/s. BPCL Mahul has given Disclaimer Certificate in each case to the applicant certifying the duty payment on the said goods and stating that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be denied for procedural lapses. Procedure has been prescribed to facilitate verification of substantive requirement. The core aspect or fundamental requirement for rebate is its manufacture and subsequent export. As long as this requirement is met other procedural deviations can be condoned. This view of condoning procedural infractions in favour of actual export having been established has been taken by Tribunal/Govt. of India in a catena of orders, including Birla VXL Ltd., 1998 (99) E.L.T. 387 (Tri), Alfa Garments - 1996 (86) E.L.T. 600 (Tri.), T.I. Cycles - 1993 (66) E.L.T. 497 (Tri), Atma Tube Products - 1998 (103) E.L.T. 207 (Tri.), Creative Mobus - 2003 (58) RLT 111 (GOI), Ikea Trading India Ltd., 2003 (157) E.L.T. 359 (GOI) and a host of other decisions on this issue. 11. In view of above circumstances and keeping in view the existence of enough adduced evidence here in above, Government is of the considered opinion that what is compulsorily required here in the interest of justice is that the department should make positive efforts so as to confirm the basic ingredient of co-relatibility specifically when there is nothing on record to out rightly negate th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
