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TMI Blog2013 (9) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... ransit loss/excess. Therefore, a show cause notice was issued to recover the duty of Rs. 37,71,224/- on the difference in the quantity cleared from the factory gate and the quantity received at the storage location which was confirmed by the adjudicating authority vide OIO No. 6-10/Dem/JC/Dn-IV/09, dated 2-2-2010 on the ground that subsequent to the withdrawal of the warehousing provision vide Notification No. 17/2004-C.E. (N.T.), dated 4-9-2004 read with Circular No. 796/29/2004-CX, dated 4-9-2004, duty was payable at the factory gate and the assessees was liable to pay the duty on the quantity of goods cleared at the time of removal from factory gate. Therefore, they were liable to pay the duty of Rs. 37,71,224/- on the excess quantity of Naphtha & ATF cleared by them without payment of duty. 2.1 Being aggrieved by the impugned order dated 2-2-2010 the assessee filed an appeal before the Commissioner (Appeals) which was decided vide his order No. Commr (A) /283/VDR-1/2011, dated 10-8-2011 by setting aside the Order-in-Original on the ground that the assessee has followed the procedure laid down in Notification No. 46/2001-C.E. (N.T.), dated 26-6-2001. He has relied upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as 'Export Warehousing Facility'. This facility is meant for exporters who want to export the goods through export warehouses. The movement of goods from these exports warehouses either for export purpose or even for diversion to domestic sector as the case may be is to be taken care of by the jurisdictional Central Excise Officer under whom these export warehouses falls as the exporters have to execute General Bond for export as well as procuring the goods from the factory/refinery under CT-2 procedure as prescribed in Para 5 of the Circular No. 581/18/2001-CX, dated 29-6-2001. The removal of goods from factory/refinery duty free against CT-2 certificate and the receipt of the goods in such export warehouses are governed by the procedures as specified in above C.B.E. & C. Circular No. 579/16/2001-CX, dated 26-6-2001 (in the case of domestic warehousing facility). 3.6 That the domestic warehousing facility was withdrawn for petroleum products vide Notification No. 17/2004-C.E. (N.T.), dated 4-9-2004 w.e.f. 5-9-2004. The implication of this withdrawal of domestic warehousing facility was explained vide Board's Circular No. 796/29/2004-CX, dated 4-9-2004 wherein it is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The clarification for export warehousing was issued later vide Circular No. 798/31/2004-CX, dated 8-9-2004 wherein it was clearly stated that "the facility of removal of petroleum products without payment of duty for export warehousing continues to be available vide Notification No. 46/2001-C.E. (N.T.), dated 26-6-2001. Board vide Circular No. 581/18/2001-CX, dated 29-6-2001 has inter alia, specified conditions, procedures, class of exporters and places of warehouses under sub-rule (2) of Rule 20 of the Central Excise Rules, 2002 for warehousing of excisable goods for the purpose of export. Thus from the above, it is clear that the procedures to be followed for domestic warehousing and export warehousing are governed by different circulars. 4.2 Revenue is relying upon the C.B.E. & C. Circular No. 804/1/2005, dated 4-1-2005 stating that the Board has denied abatement on account of losses whether transit/storage, etc., in case of end-use based exemption/export warehousing in warehouse/tanks whether intermediate or otherwise by emphasizing that the duty liability to be discharged after the withdrawal of domestic warehousing facility requires the discharge of duty liability at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refully 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 M/s. IOC Ltd. cleared petroleum products, Naphtha & ATF without paying of duty from the refinery to bonded storage location under Rule 20 of Central Excise Rules, 2002. Adjudicating authority confirmed the duty demand of Rs. 37,71,224/- involved on the goods found short at the storage location. In appeal, Commissioner (Appeals) allowed the appeal and dropped the demand by setting aside the order of original authority. Now applicant department has filed this revision application on the grounds state above. 8. Government observes that the original authority has held that the applicant has violated the condition 2(iii) of the Board's Circular No. 804/1/2005-CX, dated 4-1-2005 and hence liable to pay duty in terms of Rule 20(4) of the Central Excise Rules, 2002. The applicant has also relied upon various circulars in favour of their contentions. Government finds it proper to discuss various statutory provisions in this regard. 8.1 Rule 20 of the Central Excise Rules, 2002 reads as under : "(1) &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been withdrawn, and the Notification 46/2001-C.E. (N.T.) continued to be in existence. 8.4 The Circular No. 804/1/2005-CX, dated 4-1-2005 was issued to clarify some issues after withdrawal of warehouse facility of specified petroleum product by way of Notification No. 17/2004-C.E. (N.T.), dated 6-9-2004. The relevant portion of the said circular dated 4-1-2005 is reproduced as under :- "I am directed to say that as you are aware the facility of removal of specified petroleum products without payment of duty from the factory of production to a warehouse or from one warehouse to another warehouse was withdrawn w.e.f. 6th September, 2004 vide Notification No. 17/2004-C.E. (N.T.), dated 4th September, 2004. The facility of removal of petroleum products without payment of duty for export warehousing continues to be available vide Notification No. 46/2001-C.E. (N.T.), dated 26th June, 2001. Board vide Circular No. 581/18/2001-CX, dated 29th June, 2001 has inter alia, specified conditions, procedures, class of exporters and places of warehouses under sub-rule (2) of Rule 20 of Central Excise Rules, 2002 for warehousing of excisable goods for the purpose of export." ...... ..... X X X X Extracts X X X X X X X X Extracts X X X X
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