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2016 (11) TMI 302 - CESTAT HYDERABAD

2016 (11) TMI 302 - CESTAT HYDERABAD - TMI - Benefit of N/N. 21/2002-Cus dated 01.03.2002 - import of Marine Gas Oil - sub-sea equipment supply under NELP project - fuel used for running such vessels is exempt under S. No. 217 ibid - whether MGO is different from HSD (High Speed diesel oil) and is MGO exigible to benefit of N/N. 21/2002-Cus dated 01.03.2002? - Held that: - The issue stands squarely covered by the judgments in the case of Transocean Discoverer 534 LLC Vs CCE [2015 (7) TMI 816 - C .....

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supports the case of the Custom House. There is no evidence to show that the product is not MGO. The Chemical Examiner’s report also as observed by us does not support the case of the appellant. At this juncture, the learned AR submitted that the appellants have not challenged the test report at all. In fact even though the tests were conducted much earlier the results of the samples were communicated to the appellants only in 2012, the learned counsel drew our attention to a letter written by .....

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refore the benefit of exemption is not available. - Exemption available - appeal allowed - decided in favor of appellant. - C/21781/2014 - A/30766/2016 - Dated:- 18-8-2016 - Ms. Sulekha Beevi, C.S., Member (Judicial) and Shri Madhu Mohan Damodhar, Member(Technical) Shri Sumanth Chanda, Consultant for the appellant. Shri Nagraj Naik, Deputy Commissioner(AR) for the respondent. ORDER Brief facts are that a) Appellant is engaged in oil and gas sub-sea equipment supply for oil and gas exploratio .....

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d goods mentioned in List 12 of the said Notification which are required in connection with petroleum operations undertaken under specified contracts under the NELP from the whole of customs and additional duties. List 12 of the said Notification inter alia, includes vessels, equipments, spares, materials and consumables for running, repairing or maintenance of such goods. Thus, the fuel used for running such vessels is exempt under S. No. 217 ibid. c) The exemption is available to the Appellant .....

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Kakinada. The present issue relates to the classification of availability of exemption to the fuel used to run these vessels. The Appellant submits that Marine Gas Oil (MGO) is the fuel which is used to run these vessels. Before their voyage to India, the vessels took bunker fuel and the fuel supplied was 'Marine Gas Oil'. e) At the time of conversion, Bills of Entry were filed by the Appellant for the bunkers of the vessels, including MGO claiming exemption under Notification No. 21/200 .....

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fferent from HSD oil. f) The test reports of the sample MGO which was received from the Chemical Examiner, Visakhapatnam Custom House gave the flash point, kinematic viscosity, density and sulphur content of the samples and stated that the sample has characteristics of Light Diesel Oil (LDO). g) Finalization of the assessment in respect of Bills of Entry Nos. 158/29.7.2008, 250&251/3.11.2008, 268/20.11.2008, 281/8.12.2008, 79/30.4.2009, 133/19.4.2010 and 116/8.03.2011 in terms of Section 18( .....

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e Act, read with the conditions of the Provisional Duty (PD) Bond executed by the Applicants; j) Demand of interest at applicable rate on the differential duty amount mentioned at (i) above under Section 18(3) of the Act read with Section 28AB of the Act. k) On appeal Commissioner (Appeals) vide Order dated 21.03.2014, held as follows:- 1. The test report of the Chemical Examiner has opined that the fuel is LDO. The report is absolutely reliable and there is no doubt that the subject goods are L .....

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ke the list in the Notification, the Respondent could have exercised his discretion. 3. It is settled issue that Marine Diesel Oil is alternatively called as LDO classifiable under CTH 27101940 and MGO alternatively called as HSD is classifiable under CTH 27101930. 4. The benefit of exemption was to be extended based on the Essentiality Certificate which is clearly issued for MGO/FO and not for LDO. Hence, exemption cannot be extended to LDO. 5. To avail benefit of a Notification, a party must c .....

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t is not eligible for the exemption. It is seen that in the Test Memo No. 4/2008, while forwarding the samples, the Customs officers had asked to ascertain whether the sample is Marine Gas Oil or not. The Chemical Examiner in his Test Memo No. 1890-27-I-KKD dated 4-2-2008 endorsed below the Test Memo itself as under : The sample is in the form of Dark Mineral Hydrocarbon Oil. It has the following characteristics : 1. Flash point = 85°C 2. Kinematic Viscosity At 40°C = 4.6 cst 3. Density .....

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f of the appellant draws our attention to the specifications of Marine Gas Oil as per ISO 8217 Grade DMA, 2010. According to the specifications of ISO, Density at 15°C, has to be maximum 0.8900 whereas the sample tested at the Density of 0.8440 which is within the limits as per the ISO. 7. As regards Sulfur content he submits that according to the standards it should be 1.5% maximum whereas in the present case Chemical Examiner has found the percentage of Sulfur to be 0.880 which is aga .....

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issions to be correct. Further he takes us through the specifications according to Indian Standard for LDO also. He submits that according to the specifications for LDO, the requirements are fulfilled by the product imported by them. However he submits that just because the product fulfills the requirements of standards/parameters for LDO in respect of 4 characteristics, it cannot be said that the product is LDO and not MGO. The only conclusion that can be reached from the Test Memo is that the .....

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