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TMI Blog2025 (3) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... rehousing and subsequent export therefrom, under the provisions of Rule 20 of the Rules, read with Notification No. 46/2001-CE(NT) dated 26.06.2001. Further, on scrutiny of ARE-3, department observed that naphtha cleared against the CT-2 was not received in full quantity at the warehouse and the respondent has claimed that there was a transit loss during transportation of Naphtha from refinery to warehouse; accordingly, the respondent claimed the remission of duty on transit loss upto 1% by relying on the Board's Circular No. 261/6/20/82-CX dated 30.10.1985 and paid excise duty on the transit loss which was over and above 1%. 2.2 Department entertained the view that the Circular dated 30.10.1985 was of the period when there was re-warehousing facility for petroleum products, which was withdrawn in 2004 and consequently, the Circular dated 30.10.1985 was inoperative during the relevant period. Further, the Department was also of the view that the respondent is not entitled to transit loss and is liable to pay excise duty in the light of Rule 20 (4) of the Rules. On these allegations, show cause notices were issued proposing the demand of Central Excise duty amounting to Rs. 34, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd. v. Union of India and Others, 1980 (6) E.L.T. 258 (Bom.) 5.2 She further submits that the respondent is entitled to avail benefit of condonation of transit loss upto 1% in the light of Circular dated 30.10.1985 which is still valid and the Department is mis-interpreting the said circular dated 30.10.1985 which was never withdrawn by the Board. She further submits that Notification dated 26.06.2001 issued by Central government extended the facility of removal of goods to warehouse and consequent export therefrom. She further submits that vide Notification No. 47/2001-Central Excise dated 26.06.2001, government extended the facility of removal of goods from one warehouse to another warehouse in terms of Rule 20 of the Rules, but the said notification was withdrawn vide Notification No. 17/2004-CE dated 04.09.2004 with effect from 06.09.2004. She further submits that Notification dated 26.06.2001 which provided for export warehousing was never withdrawn by the Board and still available and the same was clarified by Circular No. 798/31/2004-CX, dated 08/09/2004. 5.3 She further submits that the Department has wrongly interpreted the Circular dated 30.10.1985 by stating that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases: * Bharat Petroleum Corporation Ltd. Versus Commissioner of Central Excise Nashik Commissionerate 2025 (1) TMI 989-Supreme Court * Yogesh Associates and Others Versus Commissioner of C.E. & S.T. -Vapi 2024 (10) TMI 447-CESTAT Ahmedabad 5.6 She further submits that the Department was aware of the activities of the appellant at the time of issuing show cause notice for the period May 2012 to September, 2012 and therefore equal penalty cannot be imposed for the Show cause notice issued for subsequent period as there was no suppression on part of the appellant. For this, she relied upon the following case: Nizam Sugar Factory Vs. Collector of Central Excise, AP 2006 (197) E.L.T. 465 (S.C.). 6. We have considered the submissions made by both the parties and perusal of the material on record, we find that the only issue involved in the present case is whether the respondent is entitled to avail the benefit of condonation of transit loss upto 1% in the light of Circular dated 30.10.1985. Further, we find that the Department has mis-interpreted the Circular dated 30.10.1985 and is of the view that the said Circular does not deal with export warehousing and only deals with clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, we find that the same issue has also been considered by the CESTAT, Kolkata Bench in the case of M/s Indian Oil Corporation Ltd. Vs. Commissioner of Central Excise, Patna reported in 2018 (12) TMI 1846- CESTAT Kolkata; the relevant findings are reproduced here in below: 7. The transit loss had happened in the movement of the petroleum products from their Refinery situated at Barauni to the warehouse situated at Raxaul. Keeping in view the nature of the goods which are volatile, some transit loss is inevitable. The question therefore to be decided is whether such transit loss can be condoned or the appellant should make good by payment of duty on such goods lost. Keeping in view the nature of goods, the Board had issued a circular as early as 30/10/1985 in which it has been clarified that transit loss upto 1% was permissible. For ready reference, the relevant portion of the circular is reproduced below:- 3. Secondly, they may be allowed to transfer nonduty-pald all brought in railway wagon tanks, to a bonded storage tank and determine the transfer quantity by taking dips in the storage tank before and after the transfer, on conditions that duty on transit shortages in excess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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