2009 (8) TMI 550 - AT - Customs

Tribunal rules in favor of appellant, vacates excise duty demand

INDIAN OIL CORPORATION LTD. Versus COMMR. OF C. EX. & CUS., VISAKHAPATNAM

INDIAN OIL CORPORATION LTD. Versus COMMR. OF C. EX. & CUS., VISAKHAPATNAM - 2010 (251) E.L.T. 121 (Tri. - Bang.) Issues:1. Demand of excise duty on clearances of LDO during a specific period.2. Imposition of penalty under Rule 25 of the Central Excise Rules, 2002.3. Interpretation of Notification No. 29/2002-C.E. and Notification No. 34/2002-C.E.4. Applicability of exemption to clearances of petroleum products under bond from specified refineries.5. Claim of exemption by the appellant based on the interpretation of the notifications.6. Consideration of case laws and absence of mala fide intention to evade payment of duty.Analysis:1. The judgment dealt with a case where an amount of excise duty was demanded from the appellant for short payment on clearances of LDO during a specific period, along with the imposition of a penalty under Rule 25 of the Central Excise Rules, 2002. The demand was based on the interpretation that the exemption under Notification No. 29/2002-C.E. was not admissible to clearances of LDO from the warehouse of the assessee as the goods had not been received directly from a specified refinery under bond.2. The appellant argued that they had paid duty on clearances of LDO to their customers, availing the benefit of the notification. They contended that the exemption should apply to petroleum products received under bond in the installation of the assessee and cleared on payment of duty from the warehouse. The appellant cited case laws to support their claim and emphasized the absence of mala fide intention to evade payment of appropriate duty.3. The Tribunal analyzed the Notifications No. 29/2002-C.E. and No. 34/2002-C.E., which extended concessional rates of duty to clearances of petroleum products from specified refineries. The amended notification clarified that goods removed under bond from specified refineries and received under bond in a warehouse could be cleared on payment of duty at the concessional rate specified. The Tribunal held that the interpretation adopted by the Revenue, denying the exemption based on the goods not being received directly from the refinery under bond, was not sustainable.4. The judgment emphasized the unambiguous specification of goods entitled to exemption in the notification and highlighted that the object of the notification would be defeated if interpreted narrowly. Consequently, the Tribunal vacated the demand of duty, interest, and penalty imposed on the appellant, thereby allowing the appeal in favor of the appellant.