Appellants granted waiver of pre-deposit in duty & penalties, recovery stayed pending appeal disposal.

The Tribunal found in favor of the appellants in Appeal No. E/76/06 and E/77/06, ruling for a complete waiver of pre-deposit of duty and penalties. The Tribunal noted that the compensation payment mechanism through Public Sector Undertakings was similar to previous cases and that the appellants should not be disadvantaged compared to PSUs in similar situations. Consequently, the pre-deposit of duty and penalty was waived, and recovery stayed pending the appeal's disposal, with the matter scheduled for regular hearing on 28th December 2006.

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Issues involved: Appeal against two Order-in-Originals dated 28-7-2006 regarding demand of duty on compensation received from Public Sector Undertakings for marketing kerosene oil and non-production of evidence of duty payment by oil companies on goods cleared in-bond.

Issue 1 - Appeal No. E/76/06:
The issue pertains to the demand of duty on compensation received by the applicant from Public Sector Undertakings for marketing kerosene oil as per Ministry of Petroleum's directive. The appellant's counsel argued that the issue is covered by a previous Tribunal decision. The Revenue's representative highlighted the difference between old and new Section 4 of the Central Excise Act, stating that any additional consideration received is liable for duty.

Issue 2 - Appeal No. E/77/06:
Similar to E/76/06, this appeal involves a portion of the demand related to non-production of evidence of duty payment by oil companies on goods cleared in-bond. The appellant's counsel mentioned delayed proof of payment received from the oil companies. The Revenue's representative emphasized the adjudicating authority's distinction between old and new Section 4.

The Tribunal considered that the applicants are manufacturers of SKO and LPG under the Price Control Mechanism of the Petroleum Ministry. The mechanism of compensation payment through Public Sector Undertakings was found to be similar to previous cases decided by the Tribunal. It was noted that the applicants should not be disadvantaged compared to PSUs in similar situations where no duty demand was raised.

Consequently, the Tribunal found a prima facie case for complete waiver of pre-deposit of duty and penalties. Pre-deposit of the amount of duty and penalty was waived, and recovery stayed pending the appeal's disposal. The matter was scheduled for regular hearing on 28th December, 2006.

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