Documentary proof of prior excise duty payment defeats demand on disputed HSD quantity despite a pipeline description mismatch.

Documentary evidence showing that excise duty on the disputed HSD quantity had already been paid defeated the demand for duty and interest. The appellant's challans, computation sheets, batch details and departmental correspondence matched the relevant quantity to the Haldia Refinery payment records, and departmental verification confirmed discharge of liability. A descriptive mismatch in the pipeline reference was treated as a typographical error that could not override the verified payment record. On that basis, the confirmed demand and consequential interest were set aside.

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Issues: Whether the demand of central excise duty and interest on 12,268 KL of HSD lying in the Barauni-Kanpur pipeline at the appointed time was sustainable after the appellant produced challans, computation sheets, batch details and departmental correspondence showing that the duty had already been paid.

Analysis: The disputed quantity was traced to specific HSD batches reflected in the appellant's records and in the Haldia Refinery payment computation. The record showed that the duty payment made by the Haldia unit covered the relevant quantity, and the batch numbers and quantities matched the appellant's declaration. The apparent discrepancy in describing the pipeline as Haldia-Barauni instead of Barauni-Kanpur was treated as a typographical or descriptive error that could not override the verified payment records. The departmental verification letters also supported the conclusion that the duty liability had been discharged. In these circumstances, the confirmed demand and the consequential interest could not be sustained.

Conclusion: The demand of Rs. 3,68,40,813/- on 12,268 KL of HSD was not sustainable and was set aside in favour of the assessee.

Ratio Decidendi: Where documentary evidence and departmental verification establish that excise duty on the disputed goods has already been paid, a demand cannot be sustained merely on the basis of a descriptive or typographical mismatch in the record.

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