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2016 (6) TMI 1020 - CESTAT HYDERABAD

2016 (6) TMI 1020 - CESTAT HYDERABAD - 2016 (344) E.L.T. 657 (Tri. - Hyd.) - Demand of duty on operational loss in excess of 0.5% - permissible limit - business of refining and marketing of Petroleum products - difference between physical stock and the book sock is called operational loss. - Held that:- It can be seen that there is no upper limit fixed for operational losses. In case it is higher that 0.5% or 1% the Board has to closely scrutinize the case and satisfy themselves. The department .....

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sion of any deliberate act/omission to evade payment of duty. The respondent being a Government of India undertaking, there cannot be any malafide intention to evade payment of duty. - The department has failed to establish that the operational loss claimed by respondent is not due to natural causes - No demand - Decided against the revenue. - Appeal No. E/1065/2006 - A/30468/2016 - Dated:- 19-5-2016 - Ms. Sulekha Beevi, C.S, Member(Judicial) And Mr.Madhu Mohan Damodhar, Member(Technical) Sh .....

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oducts are stored. The petroleum products by nature having low boiling points are prone to evaporation while in storage, in transit and while handling. Hence the difference between physical stock and the book sock is called operational loss. Taking into consideration these factors, the CBEC by its circular No.6/36/70-CX, dated 08-12-1970 has fixed the permissible storage loss as 0.5%. 3. During the course of verification of daily stock account and ER-1 return, the department noticed physical sto .....

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the demand subsequently alleging suppression of facts invoking extended period is not sustainable beyond one year. 4. The contention of Revenue in this appeal is that the respondent though file RT-12 returns did not indicate the storage losses tank wise in the monthly returns and is guilty of suppression of facts. That therefore the extended period is invokable. That the period from July, 2001 to November, 2003 would therefore be within normal period. That the Commissioner has failed to take no .....

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admissible loss is only a guiding factor. Since there is no evidence of clandestine removal or pilferage, the losses exceeding even the permissible limit can be condoned treating them as genuine storage losses. Even Board in their circular referred to above have clarified that when the remission of duty on storage or other losses claimed by the assessee exceeds 1%, the department has to closely scrutinise the case and satisfy themselves. In the present case, there is no dispute that the losses .....

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