Central Government has issued a notification no.37/2007-central excise date 1-11-2007 to amend notification no. No.64/95-Central Excise, dated the 16th March, 1995  to grant the exemption of Fuels falling under Chapter Heading 2710 subject to:

If,-

(a) manufactured and supplied by Indian Oil Corporation Limited as stores for consumption on board a vessel of the Indian Navy or Coast Guard; or

(b) procured by Indian Oil Corporation Limited from any other manufacturer of the said fuels and supplied as stores for consumption on board a vessel of the Indian Navy or Coast Guard: Provided that-

(i) Indian Oil Corporation Limited obtains registration under rule 9 of the Central Excise Rules, 2002, with the Assistant Commissioner or Deputy Commissioner of Central Excise having jurisdiction over the concerned supply point;

(ii) maintains records of receipt and supplies of these fuels;

(iii)  submits a monthly reconciliation statement to and proves to the satisfaction of the jurisdictional central excise officer that such fuels have been supplied as stores for consumption on board a vessel of Indian Navy or Coast Guard; and

(iv) failing which Indian Oil Corporation Limited pays the excise duty leviable on fuels not properly accounted for along with interest."

Excise duty exemption for fuel supplies to naval and coast guard vessels conditioned on registration, records, and reconciliation. Fuels under Chapter Heading 2710 supplied by Indian Oil Corporation Limited as stores for consumption on board Indian Navy or Coast Guard vessels are exempt from excise duty where IOC manufactures or procures and supplies such fuels and complies with conditions: registration under rule 9 of the Central Excise Rules, 2002 with the jurisdictional Assistant/Deputy Commissioner; maintenance of receipt and supply records; monthly reconciliation and proof to the satisfaction of the jurisdictional central excise officer; and payment of excise duty with interest for fuels not properly accounted for.