TMI Blog1999 (5) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975, as described in the impugned order at pages and in appeal memorandum under bills of entry Nos. 8142, 8143, dated 24-2-1994 and 3368 and 3369, dated 9-2-1994 under IGM Nos. 548(1)(2), 396(1 )(2) of quantity of 7500 MT (10968.119 KL), 7482.881 MT (10943.084 KL), 7500 MT (11011.599 KL) 7486.867 MT (10992.17 KL) in all 29969.348 MT (43975. 1199 KL), ship discharge quantity of 3409.651 MT (10,835.991 KL), 7517.362 MT (20993.390 KL), 2570.648 MT (11115.225 KL), 7405.666 MT (10872.998 KL), and shore quantity of 3395.510 MT (10820.320 KL), 7439.915 KL, 7541.329 (MT) (11092.061KL), and 7373.160 MT (10838.647 KL) respectively. Appellant filed bills of entries for home consumption in which quantities were mentioned in terms of relative bill of lading under which goods were imported into area, claiming concessional rate of duty at Rs. 66/- per KL in terms of Notification No. 158/1976, dated 2-8-1976 read with Notification No. 102/90-C.E., dated 11-5-1990 as amended, on the ground that the raw naphtha was imported into India for the manufacture of petrochemicals, which were provisionally assessed under Section 18 of Customs Act, 1962 and the goods were allowed to be cleared for home consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing process, nor has been sold to crude oil refineries as per para 156(J)(18) read with para 23 of Export Import Policy 1992-97 and Foreign Trade (Development Regulation) Act, 1992 and called upon the appellant to show cause as to why action should not be taken for the contravention of the above Policy under Section 111(d) and 112 of Customs Act, 1962 and also why differential duty of Rs. 11,68,04,329/- as per the annexure should not be charged from them. It was further alleged that the quantity on which duty was leviable is the quantity ascertained as per the difference between discharge quantity and quantity consumed as per end use certificate issued by the Central Excise authorities. It was also alleged that the appellant did not consume 70,648 MT (103.626 KL) and 64.721 MT (95.02387 KL) of imported naphtha covered under bill of entry Nos. 3368 and 3369 both dated 9-2-1994, nor submitted the end use certificate in respect of bill of entry Nos. 8142 and 8143 dated 24-2-1994. After receipt of the replies dated 2-1-1998, 18-2-1998 and hearing the appellant and after perusal of the documents produced, impugned order was passed on 6-4-1998 confirmed the demand of differential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice never proceeded on the basis of any permissible loss, and the appellant had no opportunity, as this was the first case of imported naphtha being taken for final assessments. Total loss of 430 kl of raw naphtha amounts to less than 1 percent and it ought to have been allowed. It is not permissible in law to take the quantity shown as quantity discharged, as this is only a notional quantity as per surveyor s report. The difference between the notional quantity discharged and the quantity received as per shore out turn is 164.499 kls. This is not actual, but notional and this amount of raw naphtha did not exist at all. Thus no duty can be levied on the same. The difference between the shore out turn as per shore out turn and the quantity mentioned in the end use certificate was 265.77 kls. This differential amount of raw naphtha was never received by the appellant from the BPCL Refinery Tank. As admittedly this quantity was not sold to BPCL or diverted from BPCL tank to any other party; it has to be considered as accounted for as evaporation loss while in transit, storage and handling, measurement errors etc. No duty in any case could be demanded. So the appeal has to be allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually used in the manufacture of final product use for the purpose of manufacturing the final product sufficient for the benefit of Chapter X Procedure (paras 5, 6) 1998 (101) E.L.T. 194 in the case of C.C.E., Vadodara v. Gujarat State Fertilizer Co. Ltd. It is held that raw naphtha brought under concessional from factory for intended use of manufacture as fertilizer. Assessee captively used ammonia (produced out of raw naphtha) for manufacture of chemical or fertilizers. Such an activity cannot be used to deny the benefit of Notification No. 187/61-C.E., dated 23-12-1961 as amended by Notification No. 75/84-C.E., dated 1-3-1984 (paras 2 and 4). 1987 (31) E.L.T. 440 in the case of J.M. Baxi Collector of Customs, Bombay it is held that for unaccounted goods, in the case of short landing, customs, measurement of shore storage tank is only acceptable method of finding out the unloaded quantity of oil for determination of shortage of oil under Section 116 of Customs Act, 1962 (para 5) 1988 (36) E.L.T. 667 in the case of South India Corporation (Agencies) Ltd. v. Collector of Customs, it is held by majority decision that in the case of short landing of goods, shortage to be determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 bills of entries were provisionally assessed under Section 18 of Central Excise Act and the goods were allowed to be cleared for home consumption. As per bills of entries it was on 10-2-1994 and 18-2-1994. This case falls under Section 28(3)(b) of the Act, according to which date of adjustment of duty after final assessment. Final assessment is made under impugned order. The appellant has also contended that earlier there was no final assessment and there was no occasion to him to speak about evaporation loss of raw naphtha. So in view of this contention of appellant that demand is time barred under Section 28 of the Customs Act, 1962 cannot be upheld and it is rejected. 8. Now, coming to the merits of the case, from the appeal memorandum and impugned order the limited issue is only in respect of 430.269 kls of naphtha, about its non accountal/utilisation in the manufacturing process. Import of four consignment of total quantity of 29903.327 MTs (43817.604 kls) of naphtha, which is a total discharge quantity, is confirmed by the appellant. But only 4387.335 KLs of naphtha was received in the oil tank at factory of appellant, and it was consumed in the manufacturing process. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naphtha, which was unloaded from the steamer to BPCL tank as certified by ullage surveyor. But its receipt into appellant s factory is not shown. Differential duty is demanded only on the ground of non accountal of 430.2691 KLs of raw naphtha. From the impugned order it is clear that regarding the compliance of conditions of notification under clause (a) to (c) there is no dispute. As contended by the appellant the quantity unaccounted comes to 1% of total quantity of raw naphtha received by the appellant on import into his factory. 50 Kms. distance is travels for supply of it from the vessel to the oil tank of appellant factory through BPCL refinery. The appellant has taken the stand in reply to show cause notice about the loss during storage in BPCL refinery, which is not accepted in the impugned order. In the absence of it, and in the alternative to stand department has not alleged any other fact such as sale to BPCL or diversion to domestic market, the case of the appellant about the volatile nature of raw naphtha and possibility of evaporation, transit and storage loss has got to be accepted. Under Section 70(2) of Customs Act, 1962 and notification thereunder No. 122-Cus. dat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
