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2016 (6) TMI 1020 - AT - Central ExciseDemand of duty on operational loss in excess of 0.5% - permissible limit - business of refining and marketing of Petroleum products - difference between physical stock and the book sock is called operational loss. - Held that:- It can be seen that there is no upper limit fixed for operational losses. In case it is higher that 0.5% or 1% the Board has to closely scrutinize the case and satisfy themselves. The department has not conducted any such scrutiny with regard to the operational losses. Again, they have no case that products were removed clandestinely. The operational losses incurred having been disclosed in RT-12 returns the department ought to have conducted periodical verification and satisfied themselves before raising a demand. It is revealed that respondents were disclosing their operational losses in RT-12 returns. In such circumstances, it cannot be said that respondent is guilty of commission of any deliberate act/omission to evade payment of duty. The respondent being a Government of India undertaking, there cannot be any malafide intention to evade payment of duty. The department has failed to establish that the operational loss claimed by respondent is not due to natural causes - No demand - Decided against the revenue.
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