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M/s Hindustan Petroleum Corporation Ltd. Versus Commissioner of Central Excise, Mumbai-Il

2016 (7) TMI 720 - GOVERNMENT OF INDIA

Demand of duty on account of either transferred losses or on failure to furnish re-warehousing certificate - business of refining of crude and marketing various petroleum products thereof. - Held that:- Government notes that the original authority and Commissioner (Appeals) has given detailed findings with regard to factual aspect of submission of re-warehousing certificate and observed that the same were not submitted by the applicant in the prescribed manner and also failed to account for the .....

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ehousing despite several opportunities given to them in remand proceedings from time to time. - Revision application rejected - demand confirmed. - F.No.195/380/2012-RA-CX - ORDER NO. 55/2016-CX - Dated:- 31-3-2016 - SMT. RIMJHIM PRASAD, JOINT SECRETARY ORDER: This Revision Application is filed by M/S Hindustan Petroleum Corporation Ltd, (hereinafter referred to as the Applicant) against the Order-in-Appeal No. BC/331/M11/2011-12 dated 27.02.2012 passed by Commissioner of Central Excise, (Appeal .....

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erosene, LOBS, ATF etc. from Mahul Refinery to up-country warehouse. 12 Show Cause Notices were issued to pay duty on account of either transferred losses or on failure to furnish re-warehousing certificate. 2.1. The Deputy Commissioner of Central Excise vide Order-in-Original No. 117/98/DC/BPS dated 25109.1998 adjudicated the 12 Show Cause Notices and confirmed duty demand of ₹ 2,42,09,911/- after allowing 0.5% and 0.75% as condonation losses. 2.2. Aggrieved by the said order, the applica .....

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loss. 2.3. The Joint Commissioner vide Order-in-Original No. 04/2003/JC/RLM dated 16.04.2003 held that Show Cause Notice issued at Sr. No. 1 and 10 are not in dispute, that in show cause notices at Sl. No. 3,4,7 and 9 re-warehousing certificates were submitted by the applicant, that in show cause notices at Sl. No. 2,5,6 and 8 allowed condonable loss and duty calculated accordingly, SCN at Sl. No. 12 the same was not disputed as the duty charged on transfer loss in excess of condonable limit and .....

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there was no penalty imposed in the first adjudication order and same could not have done in subsequent de-novo proceedings 2.5. The applicant filed appeal before the Revisionary Authority who vide order no, 358/04 dated 29.10.2004 held that "those cases where submissions of re-warehousing certificates is the issue, the authorities below held that proper endorsements are not present Government notes that the applicants are reputed NavRatna Public Sector Undertaking and they submit that prop .....

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arehousing certificate is the issue and confirmed the duty of ₹ 1,41,94,512 involved under Rule 156 B (2) read with Rule 173 N of erstwhile Central Excise Rules, 1944 and for recovery of interest thereof. 3. Being aggrieved by the Order-in-Original the applicant filed an appeal before Commissioner (Appeals) who vide Order-in-Appeal No BC/331/M-II/2011-12 dated 27.02.2012 who rejected the same. 4. Being aggrieved by the impugned Order-in-Appeal, the applicant has filed this revision applica .....

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t's refinery at Mumbai. That the products were duly received back into the tanks of applicant's refinery and duly accounted in the stock register RG-I maintained by them at the refinery. That the relevant D 3 filed in this regard and the re-warehoused AR3As were produced for verification but have not been considered by the adjudicating authority. 4.2. That the duty demand of ₹ 3,15,255 /- and ₹ 84,80,524 /- (Total ₹ 87,95,779/-) on this account does not survive and shou .....

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overall there was only a net gain. The total accountal of the product is summarized below: S. No. Quantity shipped Quantity received Loss/Gain Net/Gain 7 465.349 1,011.944 546.595 - 10 2,449.366 1,925.643 -476.277 7 0.318 That the total voyage of the vessel Basaveshwara, there was no loss in the entire voyage but only a gain and hence the applicants submit that there is no duty liability arising in the voyage. That the AR3A for Show Cause Notice at sl. no. 7 has been considered, the AR 3A for t .....

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antity received from outside. That the Board circular itself is mentioning that the condonation is with regard to loss in storage, handling of products and deliveries by pipelines, which is including the product received. That the circular also does not restrict it only to the quantity produced but is covering the aspect of loss in the activities. That it is not disputed that this quantity was stored and handled in the refinery during the month and such a case the applicants submit that the bene .....

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is only ₹ 72,579/- which should be added to the above amount of ₹ 8,71,477/thereby resulting a duty demand of ₹ 9,44,056 /- 4.6. That the duty as confirmed by the first Order-in-Original has been paid as pre deposit and hence the question of interest does not this case. That the Order-in-Original did not impose any interest on the duty demand. 4.7. The applicant placed reliance on following case laws: Suresh Tobacco & Company Vs UOI (High Court of Orissa) 2007(213) ELT 429( .....

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PCL attended the hearing on behalf of the applicant who reiterated the grounds of revision application and also submitted additional written submission reiterating the same grounds and stated that demands pertaining to SCNs at Sr. No. 1,11,10 are being contested. That Sr. No. 1 & 11 question of endorsement at receiving end does not arise as goods were received back by the refinery due to technical problems and were not re-warehoused. 6. Government has carefully gone through the relevant case .....

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duty demand of ₹ 2,42,09,911/- after allowing 0.5% and 0.75% as condonation losses. Commissioner (Appeals) vide Order-in-Appeal No. RJB/48/M-II/2000 dated 08.09.2000 held that the computation of recoverable duty as correct, order passed in respect of show cause notices at serial. no. 1 and 10 is also correct and in respect of re-warehoused certificates as claimed by the applicant. The case was remanded back to Joint Commissioner to decide the same afresh taking into consideration the condo .....

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Cause Notice at Sl. No. 12 the duty charged on transfer loss in excess of condonable limit has not disputed by the applicant. Thus only show cause notice at Sl. No. 11 is in dispute: Thus the adjudicating authority confirmed the demand to the extent of ₹ 1,39,59,176/- after allowing condonable losses and also imposed penalty of Commissioner(Appeals) vide Order-in-Appeal No. PKA/90/M-II/2003 dated 29.08.2003 upheld the Order-in-Original as far as the duty demand is confirmed but set aside .....

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I/2010 dated 10.01.2011 observing that re-warehousing certificates were an issue only in show cause notices no. 1,10,11 and therefore considered only these three cases and confirmed the duty amounting to ₹ 1,41,94,512/-. Commissioner (Appeals) vide Order-in-Appeal No BC/331/M-II/201112 dated 27.02.2012 rejected the appeal of the applicant. Now, the applicant has filed this Revision Application before the Central Government on the grounds mentioned at para 4 above. 8. Government observes th .....

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r Undertaking & they submit that proper accounting of the subject goods has been done. They also submit that the deposit of duty has already been made. Hence, Government is of the opinion that factual position is to be ascertained by the lower authority by making reference to the jurisdictional Central Excise Authorities. The Applicants are also directed to do the same. 14, Hence, the matter is remanded to the lower authority partially, as specified above, for passing fresh order. Rest of th .....

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sesse had been asked to of ARS A for necessary verification. present also assesse could not submit any further evidences of re-warehousing of the said goods and which can be confirmed from assessee's letter dated 04.11.2010 that therein they have stated in their reply that "copies of duly re-warehoused AR 34 has to be sent by receiving location Excise Superintendent to dispatch location Superintendent and being an internal n7atter of Excise, and also they do not have the copies of such .....

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laid down in the said Rule and a/so duplicate copy of AR 3A's application endorsed with the said Rule and a/so duplicate copy of AR3AS application endorsed with the re-warehousing certificate has a/so not been received by such Range Officer from the officer-in-charge of the re-warehouse of destination in such case the consignor has not submitted the sufficient proof of re-warehousing of the said goods sent from their refinery and hence they are also liable to pay duty on such goods where ev .....

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e concerned Central Excise officer within 90 days of transport permit. Non-submission of the same within 90 days would make the appellant to pay duty. 7. Further, in terms of Rule 156 B (2), if the appellant procures the said certificate with proper endorsement, after the mandatory 90 days and the same is produced before the proper Central Excise officer, then he can seek refund of the duty paid under Rule 156 A. 8. The appellants claimed that they have produced copies of D-3 to the lower Adjudi .....

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