2007 (8) TMI 534

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..... 3.1 The relevant facts, in brief, relating to Appeal No. E/1845/2005 wherein the challenge is against demand of interest are as follows: (a)     The appellant are clearing various petroleum products through Tank Wagons and Lorries to various locations without payment of duty under Bond under cover of AR3A. These movements are under the warehousing provisions contained in Rule 20 of Central Excise Rules, 2002 and the notifications issued thereunder. (b)     The present dispute relates to the period Oct. '03 to March '04. (c)     There were cases where the quantities re-warehoused were found to be lesser than quantities dispatched and treated as transit losses. (d) &....

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....Rs. 2,23,77,518/- on the same issue for the period April '04 to June '04. (e)     The Commissioner passed the following orders: "(i) I confirm the demand of Rs. 1,56,13,216/- on 6590.128 KL for the year 2003-2004 and Rs. 2,07,66,762/- on 1715.877 KL for the period April '04 to June '04 on transit losses on movement of the petroleum products under bond through pipeline under the provisions of Section 11A of the Central Excise Act, 1944. (ii) I also order to pay interest at appropriate rate under Section 11AB of the Central Excise Act, 1944 from the date of re-warehousing till the date of payment of duty." 4.1 The learned Advocate for the appellant submits that in respect of Appeal No. E/1845/2004, as the duty inv....

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....not well conceived. The decision in the case of Machino Montel has been overruled and no relief can be claimed merely on the ground the duty involved has been paid before issue of show cause notice. Wherever short-levy, short-payment or non-levy, or non-payment is noticed the manner of determination and demand of such short-payments by issuing show cause notice has been provided under Section 11A of the Central Excise Act. Section 11A (2B) provides situations when the person chargeable with the duty pays the amount and intimates, show cause notice need not be issued. Even in such cases interest under Section 11AB is payable as clarified by Explanation (2) of Section 11A(2B) in other cases also, where short-payment is determined the interest....

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....he shortage assignable to a particular quarter can be raised at the end of the quarter. For all other shortages not assignable to a particular period, demands may be raised if necessary, at the end of the year when the annual reconciliation statement is available. Regarding the limit of condonation of losses, it may be emphasized that this is the maximum limit to which the losses can be condoned. If it is felt that there is improper accountal of the goods or the condonation which is claimed by the assessee is not supported by the documents, action to safeguard the interest of the revenue should be taken. 3. The jurisdictional Commissioners are requested to extend the time-limit for submission of warehousing certificates wherever necessary,....