1984 (1) TMI 322 - AT - Central Excise

Tribunal denies concessional rate claim for furnace oil due to procedural non-compliance

BHARAT PETROLEUM CORPORATION LTD. Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY

The Tribunal dismissed the appellant's claim for a concessional rate of duty on furnace oil due to non-compliance with Chapter X procedures at the time of ... - Issues Involved:1. Applicability of concessional rate of duty on furnace oil based on Notification No. 195/76-C.E.2. Compliance with procedural requirements under Chapter X of the Central Excise Rules, 1944.3. The timing of the application of concessional rates-whether from the date of notification or the date of application.Detailed Analysis:1. Applicability of Concessional Rate of Duty:The primary issue revolves around whether the concessional rate of duty on furnace oil, as per Notification No. 195/76-C.E., dated 10-6-1976, can be availed by the appellant. The notification exempts furnace oil intended for use otherwise than as feedstock in the manufacture of fertilizers from excess duty over Rs. 40 per KL, subject to two provisos: proving the use to the satisfaction of the Assistant Collector and following the procedure in Chapter X of the Central Excise Rules, 1944.The Fertilizer Corporation of India received 8215.433 KL of furnace oil from the appellant during 10-6-1976 to 30-8-1976 and claimed to use 7745.601 KL as feedstock. The appellant paid the normal duty of Rs. 100 per KL and later filed a refund claim for Rs. 4,64,735.06, which was rejected due to non-compliance with Chapter X procedures.2. Compliance with Procedural Requirements:The procedural compliance under Chapter X of the Central Excise Rules, 1944, is crucial. The notification's second proviso mandates adherence to these procedures. The appellant argued that detailed accounts maintained by them should suffice to prove compliance, despite not following the exact procedures.The Departmental Representative countered that Rule 192, which deals with licensing and issuance of the C.T. 2 certificate, is integral to the procedure. The C.T. 2 certificate authorizes the recipient to obtain goods at concessional rates, and without it, the manufacturer cannot clear goods at these rates. The Tribunal agreed, emphasizing that Rule 192 is as much a part of the procedure as Rules 193 and 194, which deal with accountal and use of goods.3. Timing of Concessional Rates:The appellant contended that the concessional rate should apply from the date of the notification (10-6-1976) or at least from the date of application by the Fertilizer Corporation of India (29-7-1976). They cited the Allahabad High Court's decision in Satya Narain Agarwal and Others v. The Government of India and Others, which allowed exemptions from the notification date based on pre-existing conditions.However, the Tribunal found this case inapplicable as it dealt with past conditions, whereas the present case involves future compliance and monitoring. The Bombay High Court's decision in Zenith Tin Works Private Ltd. v. K.K. Verma and Others was also discussed, where proforma credit was allowed from the date of application under Rule 56A. The Tribunal noted that Rule 56A was amended to allow provisional credit, but no similar provision exists for Rule 192, indicating that the concession cannot apply from the application date.Conclusion:The Tribunal concluded that the appellant's claim for a concessional rate is not maintainable due to non-compliance with Chapter X procedures at the time of clearance. The procedural requirements, including the issuance of the C.T. 2 certificate, are essential and not merely formalities. The appeal was dismissed, upholding the orders of the Assistant Collector and the Appellate Collector.