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TMI Blog2003 (12) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... aphtha (RN), High Speed Diesel (HSD), etc. are dealt by them. RN is supplied to Fertilizer and Chemical Travancore (FACT) factory for use in the fertilizer unit. It is also supplied for other uses. RN used in the manufacture of fertilizer is exempted from Excise Duty and these facts are not disputed. 2.Supplies made to FACT are done through a pipeline without payment of duties under AR 3A procedure. During the period, 14-8-1998 to 16-8-1998, RN was supplied to FACT on payment of Excise Duty. However, since FACT informed the appellants that the said RN supplied was consumed in their fertilizer unit, the invoices issued were required to be cancelled and necessary AR 3A covering the said movement were required to be issued. The appellants com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il Appeal No. 4294/99 [1999 (112) E.L.T. 772 (S.C.)] and after considering the material on record and came to the conclusion : "… … 7. I have carefully considered the facts and circumstances of the case, the Order of the Original Authority, the grounds of appeal and also the cross-objections filed by M/s. BPCL. It is observed that the party made an erroneous payment of duty of Rs. 10,92,037/- in respect of clearances of Naphtha of M/s. FACT Ltd. After a gap of 13-16 days the party realised the mistake and on realising the mistake they tried to regularised the excess excise duty paid by not debiting duty for the subsequent clearances of dutiable goods. When the clearances of exempted goods on payment of duty was noticed after a gap of 13-16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing both sides and considering the material on record, it is found : (a) On an inspection of a PLA, on clearance effected on 27-8-1998, 28-8-1998 and 29-8-1998 the amounts short debited are observed as follows : Sl.No. Date PLA entry no. Commodity Duty to be paid (Rs.) Duty actually paid (Rs.) Amount short debited (Rs.) 1. 27-8-98 374 Motor Spirit 8,88,323 4,88,323 4,00,000 2. 28-8-98 377 Motor Spirit 10,40,850 6,40,850 4,00,000 3. 29-8-98 384 Raw Naphtha 4,56,559 1,64,522 2,92,037 23,85,732 12,93,695 10,92,037 The show cause notice after observing above factual(b) position in the PLA made an allegation : "It therefore appears that the above mentioned clearance of M/s. Raw Naphtha was without payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the order of the lower authorities takes note of this letter dated 1-9-1998, but does not take cognizance of the cancellation of the intimation, thus they do not arrive at any finding whether the cancellation was permissible to the appellants in law vide Rule 173G(2A) proviso VII extracted herein above or not. The Commissioner's order also has been arrived at, without going into, how in the facts of this case this intimation and the adjustments and taking of credits, as made by the appellants, was not permissible. The proceedings initiated and the orders of the lower authorities, therefore, cannot be sustained. As there is no short payment of duties or removals(d) clandestine i.e. without preparation of documents. Demands under Rule 9(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty paid clearance effected would meet the overall credits in the PLA if reckoned along with the adjustments as made. Since PLA account has not been maintained in the(e) prescribed manner, a penalty under Rule 226 would have been attracted. However, neither the show cause notice nor the lower authorities have proposed and/or arrived at penalty under Rule 226 of the Central Excise Rules. A reading of Rule 173Q(1), as it existed then, indicates that confiscation and penalty under the said rules could be arrived at, in this case, for violation of Clause (a) and/or (b) and/or (d) only with the rider of an intention to evade payment of duty. We come to a finding that there was no evasion of duty by the appellants in the facts of this case nor an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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