2004 (6) TMI 222 - AT - Central Excise

Tribunal Overturns Excise Duty Penalty, Supports Export Compliance for Petroleum Product Manufacturer.

IOC. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, CALCUTTA-II

The Tribunal set aside the impugned order of the Commissioner of Central Excise, Kolkata-II, and allowed the appeal in favor of the appellant. The ... Demand - Export - penalty imposed on the appellant for exporting Naptha without prior approval -Appellants' export are governed by the Government of India by inviting Global Tenders and all activities were control by Oil Co-ordination Committee functioning under Ministry of Petroleum - HELD THAT:- In the present case, the factum of export has been admitted by the Customs authorities. Even in the show cause notice, it has been admitted. The Commissioner in his order has also admitted that the documents had been filed and the fact of export has been accepted. The Department's grievance is that the Superintendent of Central Excise did not attend the export. It was not required. The appellant was governed by self-removal procedure and to such cases Rule 173-O was applied. It was the appellant's option to export under supervision of either the Excise authorities or the Customs authorities. The Commissioner is competent to relax the procedural provision under Rule 12/13 of the Central Excise Rules, 1944. In the instant case, it was incumbent upon the Commissioner to grant relaxation from the procedural provisions. Thus, it was not desirable to raise the demand towards the Central Excise duty on the ground of procedural irregularities. In view of the above, appeal deserves to be allowed. Consequently, we set aside the impugned order and allow the appeal with consequential relief to the appellants. Issues Involved: Appeal against Central Excise duty demand and penalty imposed on the appellant for exporting Naptha without prior approval of Excise authorities.Summary:The appeal was filed against the order of the Commissioner of Central Excise, Kolkata-II, confirming a Central Excise duty demand and penalty on the appellant for exporting Naptha without prior approval. The appellant, a manufacturer of petroleum products, exported Straight Run Naptha (SRN) due to full storage tanks and no buyers, risking refinery operations. The Assistant Commissioner and Superintendent of Central Excise were informed about the export, and all necessary export documents were filed. The Commissioner upheld the duty demand and penalty, leading to the appeal.The appellant argued that the fact of export was admitted, and procedural irregularities were due to circumstances beyond their control, such as storage tank shortage and lack of domestic demand. They cited various Tribunal and Government of India decisions supporting their case. The appellant contended that since the goods were exported and all export documents were submitted, no duty or penalty should be imposed.The Revenue reiterated the Commissioner's findings, emphasizing the need for prior approval for exports. They argued that the duty and penalty were rightly imposed due to the lack of permission from Excise authorities for the export.The Tribunal noted that the export was controlled by the Government of India through Global Tenders, and the appellant followed the necessary procedures, including obtaining provisional clearances and filing all required documents. The Tribunal agreed with the appellant's arguments, citing previous Tribunal and Government of India decisions supporting condonation of procedural lapses for export promotion. The Tribunal concluded by setting aside the impugned order and allowing the appeal in favor of the appellant.