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TMI Blog2011 (7) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... e are that applicants are a registered central excise unit engaged in the manufacture of petroleum products. They were granted permission for clearance of raw Naphtha on provisional basis without payment of duty to M/s. FACT, Udyogamandal Division for the manufacture of fertilizers availing exemption under Notification No. 4/2006-C.E., dated 1-3-2006. The permission was granted for a period of six months from 1-2-2006. 2.1 The applicant furnished data for finalization of the provisional assessment for the period from 1-2-2006 to 31-7-2006. As per the statement furnished by the assessee during the period from 1-2-2006 to 31-3-2006, there was a gain of 265.489 MT of RN in the transfer. Another worksheet covering the entire period of Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the period 1-2-2007 to 31-5-2007 there was a loss of 240.585 MT of raw Naphtha for which the entire duty was paid with interest. During the period 1-6-2007 to 31-7-2007 there was a gain of 176.229 MT of raw Naphtha, which was accounted for properly. As such the lower authority finalized the assessment without any duty demand or refund. 3. Being aggrieved by the said order-in-original, applicant filed appeal before Commissioner (Appeals) who ordered in respect of Order-in-Original No. 20/2007 dated 20-10-2007 that computation of loss in refineries is to be worked out and adjusted on monthly basis in terms of para 69 of Petroleum Products Manual. Further Commissioner (Appeals) upheld the Order-in-Original No. 19/2007 dated 26-10-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order. In view of this, the order passed by the Commissioner (Appeals) is not legally correct and is liable to be set aside on this score alone. 4.2 Notwithstanding the above, the applicants would like to submit the following in defence of their contention that duty on account of the loss recorded in the subject clearance under this provisional assessment ought to have been calculated by ascertaining the net loss by considering the clearances of the full provisional assessment period together. 4.3 The circular dated 4-1-2005 only stipulated that the provisional assessment procedure under Rule 7 is to be followed for the said clearances and the earliest receipts at the consignee end is to be matched with the earliest clearances from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r applicable. In this context, it is quite logical that the clearance over a period of six months covered by each provisional assessment sanction order is considered as a basis for matching the dispatches from refinery with receipts by the ultimate end-user, so that the apparent disparity due to pipeline trapped quantity is evened out. 4.5 If the loss is calculated by considering the clearances for the entire period of provisional assessment together, the Commissioner (Appeals) would have found that the net loss for the period was only 64,346 MT and the applicant was eligible to get refund of the excess duty paid on the basis of loss estimated during the intervening period. 5. Personal hearing scheduled in this case on 10-2-2011, 10-5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The argument advanced by applicant that gain and loss may be worked out for the entire period of 6 months has no legal backing and therefore cannot be accepted. Government notes that Commissioner (Appeals) has rightly relied upon provisions of para 69 of Petroleum Products Manual dealing with loss of condonation in refineries which stipulates that loss/gain is to be worked out on a monthly basis and same is to be adjusted on monthly basis. The gain in any month cannot be allowed to be set off against loss in subsequent month. The guidelines are quite clear and there is no reasons for not following them. The contention of applicant are not supported by any laid down guideline or instruction and therefore cannot be accepted. 9. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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