Exemption for refinery-origin petroleum products applies even after transfer through bonded warehouses before concessional clearance.

The amended exemption for specified petroleum products under Notification No. 29/2002-C.E. as amended by Notification No. 34/2002-C.E. applied to goods removed under bond from a notified refinery to a warehouse and then cleared from another warehouse on payment of duty at the concessional rate. The notification did not require the warehouse making the final clearance to have received the goods directly from the refinery. As the scheme was intended to extend concessional duty treatment to qualifying refinery-origin products, passage through one or more bonded warehouses did not defeat eligibility. The differential duty demand was therefore unsustainable, and the exemption and consequential relief were available.

---

---

Issues: Whether the exemption under Notification No. 29/2002-C.E. as amended by Notification No. 34/2002-C.E. was available when petroleum products were removed under bond from the refinery to one warehouse and thereafter cleared from another warehouse on payment of duty at the concessional rate.

Analysis: The amended notification extended the exemption to specified petroleum products removed under bond from the notified refineries to a warehouse and subsequently cleared from the warehouse on payment of fifty per cent of the duty. The text of the amendment did not restrict the benefit to cases where the warehouse from which clearance was made had received the goods directly from the refinery. The purpose of the notification was to extend concessional duty treatment to the notified petroleum products originating from the specified refineries, and there was no basis to deny the benefit merely because the goods had passed through one or more bonded warehouses before final clearance.

Conclusion: The demand of differential duty was not sustainable, and the denial of exemption was /unsustainable on the ground that direct receipt from the refinery was absent. The assessee was entitled to the exemption and consequential relief.

---