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TMI Blog2022 (9) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... oil, furnace oil, bitumen, jute batching oil (JBO) and LSHS. It is aggrieved by the order in original dated 2.5.2008 passed by the Commissioner of Central Excise, Vishatapatnam as amended by corrigendum dated 4.8.2008 whereby an amount of Rs. 1,06,58,056/- has been demanded from the appellant as duty under the proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944 along with interest under Section 11AB. 2. Usually, when goods are manufactured duty becomes payable when they are cleared from the factory. However, Rule 20 of the Central Excise Rules, 2002 provides for the Central Government to extend the facility of removing the goods from the factory of production to a warehouse, or from one warehouse to another warehouse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these details but the appellant failed to provide the data. Consequently, a show cause notice covering the period April 2004 to March 2006 was issued based on the information available in the quadruplicate copies of the AR3As (the re-warehousing certificates) received from the consignees. Repeated letters were written to the appellant but it had not provided the required data. 4. Thereafter, the show cause notice was taken up for adjudication. During hearing, the appellant submitted that it had switched over to a new ERP system which resulted in teething troubles and consequential delays in submitting statements of loss of the products during transit. Nevertheless, it submitted the details of the losses to the Commissioner during hearing w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities need not enter into detailed scrutiny to verify the bonafide of the reported loss. However, when a claim for the condonation of loss above 1% is made the officers concerned have to very closely scrutinize the case and satisfy themselves that the claim is genuine, technical advise may also be sought. When the remission of duty on storage or other losses claimed by the assessee does not appear genuine, the Department has to issue a Show Cause Notice before rejecting the claim." 7. Learned Counsel submits that in view of the above clarification, CBEC has prescribed a limit of 1% without reference to any specific products and the losses incurred by them in this case were below 1% and, therefore, duty on the same need to be rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al loss was only 0.3% because the quantity handled was wrongly recorded as 12,936.69 KL by the Commissioner instead of 1,27,936.699 KL. He submits that this resulted in a clerical error of demand of Rs. 45,62,684/- which needs to be set aside even on this ground. Lastly, he also submits that the demand is time barred after the period August 2005 and there is no evidence of fraud or collusion or willful mis-statement or suppression of facts. He prays that the impugned order may be set aside. 9. Per contra, Shri V.R. Pavan Kumar, learned Authorised Representative supports the impugned order. He submits that remission of duty by the Commissioner can only be considered if the appellant applies for remission but it has not applied for remission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation of the extent of losses is within the exclusive knowledge of the appellant and it is its responsibility to provide the data. Having delayed in providing the data, the appellant cannot profit from its own inaction and now argue that the demand is time barred. The appellant's contention is that it was switching over to a new system which caused teething troubles because which of it was unable to provide the data within time. Even if it be so, the fact remains that appellant has not provided the data and is now trying to profit from its own inaction to claim that the demand is time-barred. Therefore, we find the appellant had actually suppressed the information from the Department and now cannot benefit by claiming that the demand is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... almost in all the cases is below 1%. We also find that in respect of certain commodities such as Sulphur, Naptha, JBO, ATF etc, the Commissioner has reckoned condonable limit of 0%. This is probably because these products were not mentioned in Circulars of 1956 and 1959. However, since the 1981 Circular of the Board clarifies that losses of up to 1% can be allowed without detailed scrutiny and loss above 1% can be condoned after scrutiny, we find no reason to not condone losses in these cases as claimed. There is no allegation, let alone evidence, that the losses were not genuine or that the products were suspected to have been diverted or pilfered. With respect to motor spirit, for the month of April 2004, learned Counsel submits that dur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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