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M/s. Indian Oil Corporation Ltd. Versus Commissioner of Central Excise, Mumbai-II

2015 (4) TMI 1034 - CESTAT MUMBAI

Wrongful availment of CENVAT Credit - Credit availed on full goods mentioned in invoice however, received less goods - Held that:- Goods involved in the present case are lubricating base oil. Ld. Counsel for the appellant has produced copy of supplement to the manual of departmental instruction on excisable manufacture product. In the said manual different limit has been prescribed for different goods and different method of transfer etc. In the case of lubricating base oil the permissible limit .....

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the five factors enumerated in the larger bench decision. In nutshell, the conclusion is that Cenvat credit availed and utilized on short receipt of base oil in excess of 0.1% is not permissible. We do not find any thing wrong in the said findings. - However, penalty is set aside - Decided partly in favour of assessee. - APPEAL NO. E/117/12-MUM - Dated:- 28-4-2015 - Mr. P.K. Jain, Member (Technical) And Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri. T.C. Nair, Advocate For the Res .....

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shown in the invoices/bills etc. However on scrutiny of the documents viz. AC-13, OUT TURN report vis-a-vis invoices, it was noticed that appellant had received base oil in short quantity. Revenue issued show cause notice F. No. V. Adj.(30) Ch-I/CR-61/IOCL/Commr./M-II/09 dated 5/1/2010 wherein demand of duty of ₹ 1,64,40,644/- was made in respect of short receipt of inputs i.e. base oil during the period December, 2004 to March 2009 invoking extended period of limitation. It was also propo .....

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7,482/- was also imposed under Rule 15(1) of Cenvat Credit Rules, 2004. Aggrieved by the said order, the appellant is before us. 2. Ld. Counsel for the appellants contention is that the department has prescribed a limit of 0.1% in respect of lubricated oil base stock vide Board Letter No. 11-A/6/70/CX.8 dated 30/4/1971. He further submits that these limits were prescribed when the warehousing provisions were applicable to the petroleum product and goods were moved from refinery to warehouse or .....

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oss may be allowed. Ld. Counsel further submits that the Larger Bench of this Tribunal in the case of Commissioner of C. Ex., Chennai Vs. Bhuwalka Steel Industries Ltd. [2010(249)E.L.T. 218(Tri- LB)] has discussed the matter in detail with reference to the Cenvat Credit Rules and in para 12 have laid down criterion. It was further submitted that the Commissioner has taken note of the said decision of the Tribunal and has discussed the same in detail in his order and has observed that the permiss .....

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ternal page 16 of order-in-original while discussing test laid down by the Larger Bench of this Tribunal, Ld. Commissioner has held that Cenvat credit availed and utilized on short receipt of base oil in excess of 0.1% is not permissible and hence the same is recoverable from them. It was further submitted that though the Ld. Commissioner has held that Cenvat Credit availed and utilized on short receipt in excess of 0.1% is sustainable but has confirmed the demand without extending the benefit o .....

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t limits are applicable only to the goods cleared without payment of duty is without any basis. Evaporation, transit loss or handling loses are not depended upon the fact that the goods are duty paid or non duty paid and would be same in both the situations. 4. We have considered rival submissions. 5. At the out set we note that demand confirmed is only for the normal period of limitation. The goods involved in the present case are lubricating base oil. Ld. Counsel for the appellant has produced .....

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purpose of availment of Cenvat credit under Rule 3(1) of Cenvat Credit Rules. We also note that the Commissioner in the impugned order has taken note of such factors and discussed in detail the relevance or irrelevance of each of the five factors enumerated in the larger bench decision. In nutshell, the conclusion is that Cenvat credit availed and utilized on short receipt of base oil in excess of 0.1% is not permissible. We do not find any thing wrong in the said findings. In our view the said .....

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