TMI Blog2014 (2) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-2007 by inserting a new entry - Following decision of Moosa Haji Patrawala Pvt. Ltd. [1999 (8) TMI 208 - CEGAT, NEW DELHI] and LEADER ENGINEERING WORKS Versus COMMISSIONER OF C. EX., CHANDIGARH [2006 (2) TMI 193 - SUPREME COURT OF INDIA] - Decided against assessee. - E/766/08 & E/326/09 - Final Order Nos. A/1042-1043/2013-WZB/C-II(EB) - Dated:- 3-12-2013 - P R Chandrasekharan And Anil Choudhary, JJ. For the Appellant : Shri M H Patil, Adv. For the Respondent : Shri Shobha Ram, Commissioner. AR PER : P R Chandrasekharan The appeals are directed against orders-in-original nos. 07/Commr/M-II/08 dated 6/2/2008 and 35/Commr/09 dated 19/10/09 passed by the Commissioner of Central Excise, Mumbai II Commissionerate. Since the issues involved in both these appeals are common, they are taken up together for consideration. 2. The facts relevant to the case are as follows. The appellant, M/s. Hindustan Petroleum Corporation Ltd. (HPCL, in short) removed high speed diesel oil (HSD in short) to M/s Indian Oil Corporation Ltd. (IOCL) without payment of duty during October 2006 to June 2007 and July 2007 to October 2007 claiming the benefit of notification NO. 64/95-CE dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oticed in the administration of end-use exemption, the same may be examined by the Chief Commissioner immediately and the details promptly reported to the Board with suitable suggestions and recommendations including any refund mechanism. From the above circular it is clear that it was not the intention of the Government to deny end-use exemptions to refineries of petroleum products supplied on end-use basis and therefore, the denial of exemption to the appellant is not sustainable in law. (2) The matter was once again examined by the CBEC in 2005 and the Board vide circular dated 4-1-2005 had further clarified as follows:- Following the withdrawal of warehousing facility, certain issues have been raised by field formations and the oil companies stating the difficulties being experienced. The issued have been examined by Board. The various issues and the decisions on these are being communicated as below: (i) Issue : The Oil Companies, due to logistical reasons, cannot supply the petroleum products under end-use based exemptions (including the supplies of petroleum products to vessels of Indian Navy or Coast Guard), directly to the actual users without routing the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as international flights and the supplies of ATF (Aviation Turbine Fuel) to foreign-going aircrafts cannot be made directly from the refinery. Further, they have reported difficulties in installing multiple storage tanks (separate for domestic and export clearances) at the site of the airport due to space constraints. Similar problem has also been reported for supply of Bunker Fuel (FO/LDO/HSD) to foreign-going vessels and coastal vessels. Decision : In such cases, ATF cleared for export warehouse may be allowed to be stored in the intermediate storage tanks subject to condition that such intermediate storage tanks are used exclusively for storing export goods. The details of such intermediate storage tanks including their physical location in the concerned installation should be intimated to jurisdictional Central Excise officer. Accordingly, para 6.1 in Circular No. 581/18/2001-CX dated 29th June, 2001 issued for export warehousing is modified as below: "6.1 receipt of goods will be governed by the procedure specified under Circular No. 579/16/2001-CX dated 29th June, 2001 issued under rule 20 with the modification that in case of Aviation Turbine Fuel intended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29) ELT 100] wherein IOCL was held eligible for refund of the excise duty paid by the refinery in respect of HSD/LSHS supplied to naval vessels though the supply was not made directly from the manufacturer to Indian Navy. The said decision was also concurred with by the Ministry of Law as evident from the letter dated 2-1-2009 of the Petroleum Secretary of the Govt. of India addressed to the Cabinet Secretariat while seeking permission of the Committee on Disputes to file appeal against the impugned orders. Reliance is placed in the decision of this Tribunal in the case of Garden Reach Shipbuilders Engineers Ltd. [2010 (99) RLT ONLINE 261 (CESTAT-KOL)]. (4) The ld. counsel also relies on a number of decisions of the hon'ble Bombay High Court at the interim stage (in WP Nos. 1477 of 2009 7478 of 2009) wherein the hon'ble High Court had directed the appellant to execute bond instead of cash deposit by PSUs while contesting duty liability. (5) It is also contended that notification NO. 64/95-CE was subsequently amended by notification 37/2007-CE dated 1-11-2007 which provided for grant of exemption to fuels procured by IOCL from any other manufacturer of the said fuels and sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also placed on the decision of this Tribunal in the case of Moosa Haji Patrawala Pvt. Ltd. wherein also the supply was effected to Voltas Ltd. who in turn supplied the goods to Indian navy and it was held that benefit of duty exemption under notification No. 70/77-CE (predecessor to notification 94/95) would not be available. The said decision was affirmed by the hon'ble Apex Court as reported in 2000 (119) ELT A82 (SC)]. (e) As regards the reliance placed by the appellant on the circulars issued by the CBEC, the ld. AR submits that the appellant did not follow the procedure prescribed therein so as to be eligible for duty exemption. Accordingly he pleads that the impugned orders are sustainable in law and be upheld. 5. We have carefully considered the rival submissions. 5.1 During the period involved in these appeals, notification 64/95-CE which granted duty exemption, inter alia, to goods supplied as stores to naval vessels read as follows:- S. No. Description of goods Conditions 3. All goods other than cigarettes If supplied as stores for Consumption on board a vessel of the Indian Navy 5.2 Subsequently, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board's circular relied upon by the appellant related to supply of petroleum products to the end users by routing the goods through installations which may cater to more than one user or utilizing the same intermediate storage facility for storing both duty paid and non-duty paid petroleum products. In either of these situations, the clarification pertained to supply of the petroleum products by the refinery. The said clarification did not pertain to a situation where the goods were supplied to another intermediating entity who in turn supplied goods to end-user. Therefore, these clarifications do not help the cause of the appellant. The appellant's reliance on the interim orders passed by the hon'ble Bombay High Court is also of no avail as in these cases, the high court only directed the appellants therein to execute bonds in lieu of cash payment towards pre-deposit and the hon'ble High Court did not lay down any ratio precedent. It is also a well settled position that decisions rendered at the interim stage of stay are only prima facie views and they are not binding precedence. 5.3 The appellant has also placed reliance on a letter dated 2-1-2009 written by the Petroleum S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. M/s. Leader Engg. Works was a manufacturer of valves and cocks, sanitary bathroom fittings, etc. and supplied the said goods without payment of duty on the basis of supply/purchase orders by Mazgaon Docks Limited, Garden Reach shipbuilders and Goa Shipyard Ltd. as agent of Indian Navy and on behalf of Indian Navy and on the strength of certificates given by the Indian Naval Officers and claimed the benefit of notification 64/95-CE. The said benefit was denied by the adjudicating and appellate authorities and the mater reached the Apex court and the apex court held as follows:- 8. Being aggrieved, the appellant filed the appeal before the Tribunal which has been dismissed by the Tribunal relying upon its earlier decision in Collector of Central Excise, Bombay vs. Moosa Haji Patrawala Pvt. Ltd. reported in 1999 (114) ELT 620 (Tribunal). It has been held by the Tribunal that the benefit under the notification was admissible only if the goods were supplied directly to the Indian Navy as stores for consumption on board a vessel of the Indian Navy and not through the ship builders on a certificate issued by the Indian Navy that the goods supplied by the appellant would be used ..... X X X X Extracts X X X X X X X X Extracts X X X X
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