9911796707
TMI Blog2012 (9) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... factured by them and packed in unit containers falling under CETH 2710.19.80 was found. The applicants had declared these shortages in their monthly ER-1 returns for the month of April, 2007, but they had neither furnished any reasons/explanation for the shortages found in their excisable goods, nor they have discharged the duty liability on said shortages. It was, thus, construed that the goods in question i.e. 10562.774 Ltr. of lubricating oils of various grades packed into unit containers found short, were removed by the applicants, without payment of Central Excise duty, in contravention of Rule 4 and Rule 8 of Central Excise Rules, 2002 and therefore, the Central Excise duty amounting to Rs. 1,20,954/- was recoverable from them. Therefore, a show cause notice dated 24-3-2008 was issued, demanding the said Central Excise duty under Section 11A alongwith interest and seeking penal action under Rule 25 of Central Excise Rules, 2002. After duly considering the submissions of the applicants, the adjudicating authority adjudicated the case vide impugned order-in-original confirming the duty demand and imposed penalty on the following grounds:- 2.1 The contentions of the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in different unit packings and the brand grades/packings in which the excesses have been found. Further, the assessable value which is based on the packing quantities of each grades varies for packing quantities of different grades and even varies for different packing quantities under the same grade and as such the shortages found in packed lubricating oil of different grades and packing quantities cannot be adjusted with the excess found in another set of different grades and packed quantities especially when all these were packed goods which were entered in the statutory daily stock register as manufactured excisable goods, on which duty is chargeable. 2.6 The applicants have claimed condonation of shortages in terms of provisions of erstwhile Rule 223A and have cited judgment of Hon'ble Bombay High Court in the case of J.K. Vacuum Flask Ltd. v. UOI - 1983 (14) E.L.T. 2095. The erstwhile Rule 223A provided for condonation of losses on account of evaporation or other natural causes. The above mentioned judgment is not applicable as the shortages are in respect of finished goods packed in unit containers and thus there is no cause of evaporation loss in respect of goods pac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case. The Appellate Commissioner has also set aside the reliance placed by the applicants on the decision of CEGAT, East Regional Bench in case of Indian Oil Corporation Limited v. Collector of Central Excise, Calcutta as reported in 1984 (15) E.L.T. 479 (Tribunal), wherein, while dealing with the case of transit loss and gains of Jute Batching Oil, it was held that "It is true that neither the Central Excise Act nor the Rules made thereunder provide for condonation of loss of this nature. Just because there is no specific provision to condone the cases of this type, the authorities are not to act mechanically but duty is cast on them to examine as to whether the contention of the applicants are correct or not" on the ground that the case relied on is pertaining to transit losses and therefore the rationale of it cannot be applied on the case in hand. In this regard the applicants submit that in any adjudicating/appellate proceedings the case cited or referred to are only for the sake of guidance and helping the adjudicating/appellate authorities to arrive at a decision based on the stands that are being taken by the authorities at different levels of adjudication and appeal proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 954/- was confirmed by adjudicating authority in respect of shortage of 10562.774 litres of various grades of lubricating oils manufacture and packed in unit containers falling under CETH 2710.19. In appeal, Commissioner (Appeals) upheld the said order-in-original. Now applicant is contesting the impugned order-in-appeal on the ground discussed in para 4 above. 8. The applicants have argued that shortage were actually losses occurring from various storage and handling losses due to natural reasons and same are condonable in light of C.B.E. & C. circular dated 30-4-1971. Government notes that lubricating oil was packed in unit containers and entered in RGI register. There is no reason for shortage of packed lubricating oil, on account of the vagaries of weather or viscosity loss. Even if the losses are noticed during conversion from one grade to another, but the records maintained by applicant do not indicate such losses. There is no day to day record of such losses. It is only at the time of annual stock taking, the losses were detected which can be attributed to clandestine removal also. Moreover, after recording the production in RGI register the goods cannot be removed for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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