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TMI Blog2013 (7) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Brief facts of the cases are that the respondents M/s. Hindustan Petroleum Corporation Ltd., Visakhapatnam have effected clearance of various petroleum products to different location, local marketing installation. A show cause notice issued to them for the period December, 2007 to August, 2008 for non payment of duty on the shortage quantities. The demand was made for an amount of Rs. 4,82,089/- under Section 11A of the Central Excise Act, 1944 along with interest thereon and imposition of penalty under Rule 25 of the Central Excise Rules, 2002. They made their submissions before the adjudicating authority stating that the losses product wise during the impugned period in the show cause notice were to the barest minimum and relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoice quantity compared to the actual tank withdrawals for the losses beyond condonable limits. The adjudicating authority held that the loss upto condonable limits as prescribed by the board was 0.5% for motor spirit, kerosene and refined diesel oil, 0.25% for furnace oil and 0.05% for LSHS. Since there was no such allowance for naphtha, the adjudicating authority did not extend any allowance as condonable loss for the item. Regarding allowance for more than condonable loss prescribed by the Board, the adjudicating authority has recorded findings that the applicant had not made any justifiable case to condone the losses beyond the permissible limits. Regarding the limit for LSHS, the adjudicating authority held that the respondents claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... centages prescribed from time to time and excess losses are charged to duty unless any particular case, prima facie, merits condonation of loss in excess of the guiding percentages vide paras 69 to 74 of the Petroleum Manual, Board prescribed cumulative loss allowance of 0.5% for motor spirit, kerosene, Refined Diesel Oil, 0.25% for furnace oil and 0.05% for LSHS in terms of Rule 20(2) of the Central Excise Rules, 2002 and the conditions prescribed by the Board under Petroleum Manual are applicable to HPCL. 4.2 It is evident that condonation of loss is extended only to a few commodities of the petroleum Sector and that too with different %ages. If the Government was of the view that all the losses in the petroleum sector were to be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that condonation of storage losses was not allowed by Assistant Commissioner upto 1% the limit as prescribed in C.B.E. & C. Circular. No. 261/6/28/80-CX.8, dated 19-10-1981. He pleaded that the order-in-appeal being legal and proper may be upheld. The applicant vide their letter dated 13-1-2012 reiterated the ground of revision application as stated in para 4 above. 6. Government has carefully gone through the relevant case records and perused the impugned order-in-original and order-in-appeal. 7. On perusal of records, Government observes that the original adjudicating authority condoned the losses in terms of Board's Letter F.No. 26/23/CXM/54, dated 1-6-1956 and F.No. 9/1/17/57-CX-II, dated 2-3-1959 as explained in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e maximum condonable limit. Government also observes that Circular No. 663/54/2002-CX wherein at para 2 thereof it is clearly laid down that the limit stipulated for condonation of the losses in respect of petroleum product is the maximum limit to which the losses can be condoned. The Circular, dated 1-6-1956 and 2-3-1959 are case specific Circulars while the said Circular, dated 19-10-1981 nowhere mention about its applicability on pipeline deliveries and transit losses during in bond removal but simply indicates storage and processing losses. The Commissioner (Appeals) without going into the merit of case allowed losses upto 1%. Government notes that the original adjudicating authority has observed that M/s. HPCL was not maintaining ..... X X X X Extracts X X X X X X X X Extracts X X X X
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