Exemption for petroleum products upheld where goods moved through an intermediate bonded warehouse without breaching notification conditions.

Notification No. 29/02-C.E., as clarified by Notification No. 34/02-C.E., was construed to allow non-duty-paid petroleum products to move from a refinery to one warehouse and then to another warehouse. Receipt through an intermediate bonded warehouse therefore did not breach the exemption conditions, and the benefit could not be denied merely because the goods did not come directly from the refinery to the terminal. The exemption denial was held unsustainable, and the assessee remained entitled to the notification benefit.

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Issues: Whether exemption under Notification No. 29/02-C.E. dated 13-5-02 could be denied on the ground that the goods were not received directly from the refinery but moved via another warehouse.

Analysis: The Notification and the explanation introduced by Notification No. 34/02-C.E. were construed to permit movement of non-duty-paid petroleum products from a refinery to one warehouse and thereafter from one warehouse to another warehouse. On that construction, receipt of the goods through an intermediate bonded warehouse did not violate the conditions of the exemption, and there was no basis to deny the benefit merely because the goods had not come directly to the terminal from the refinery.

Conclusion: The denial of exemption was unsustainable and the assessee was entitled to the benefit of the Notification.

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