TaxTMI 
TaxTMI 
2008 (3) TMI 612
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....oniana Road, Bathinda 10/CE/ADC/LD..../06 dated 25-8-06 32,82,774 2. 265/07 National Fertilisers, Goniana Road, Bathinda 11/CE/ADC/LD..../06 dated 25-8-06 22,28,335 Since issue involved in both the cases is same, these are being taken up for decision through a common order. 2. Brief facts of the case are that the respondents are engaged in the manufacture Fertilisers (urea) which is exempt from payment of Central Excise duty. For the manufacture of fertilizer (urea) they procure furnace oil (F.O.), Low Sulpher Heavy Stock (LSHS) and Heavy Petroleum stock (HPS) from Indian Oil Corporation under chapter X procedure of erstwhile Central Excise Rules, 1944 and Central Excise (Removal of goods at concessional rate....
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....d in vacating the demand by holding that supply of wagons has been made good by the Railways and that the respondent has not received any payment from the Railways or the supplier. It is evident from the claim filed by the respondent with the Railways that they had short received the inputs namely Furnace Oil, Low Sulphur Heavy Stock and Heavy Petroleum Stock dispatched to them by M/s. IOC under Chapter X Procedure and Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001. Therefore, these short received quantities of inputs have not been used for the intended purpose i.e. manufacture of urea. The adjudicating authority has not brought on record any evidence, in the form of a certifica....
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....as less than the quantity of dispatched and his allowance is given not on account of variation in the temperature but on account of short receipt of goods. The buyer is required to pay duty on the value remitted by the supplier to the buyer because this is the value of quantity of the furnace oil which has not been used for the intended purpose i.e. manufacture or urea. 4. The Respondent filed the reply of the cross-objection on the following grounds :- i. On the basis of material placed before the Additional Commissioner in reply to show cause notice, the adjudicating authority accepted the factual position and explanation of the respondent supported by CA's certificate and dropped the demand,....
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....nt. The department or the assessee has to substantiate and prove its case. The position explained by the respondent in reply to show cause notice has not been countered or challenged by the department in appeal. Even today in appeal, the department has not tabled your honour any material or evidence on record to indicate much less establish that NFL received short quantity of LSHS/Furnace oil from IOC. iv. The appeal in respect of temperature variance allowance pertains to alleged short receipt of furnace oil by the respondent on the sole ground that settler (sic) [seller] IOC has passed cash allowance to buyer respondent on account of temperature variation allowance and that no formula/parameter have been discuss....
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....of our balance sheets etc. to the department on close every year as such and in the face of AR3 filed till June 2003 and RT 11 returns submitted to the department w.e.f. 1-7-2001, there can be no suppressions or intention to evade payment of duty. 5. The case was fixed for personal hearing on more than 4 occasions but neither the appellants nor the respondents appeared. Therefore, the appeals are being taken up for decision on the basis of material available on records including the submissions made by the respondents. 6. I have examined the case records. As per facts of the case the respondents obtained various Oils without payment of duty under Chapter X procedure from IOC for manufacture of fertilisers under Notification ....
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.... 7. In appeal, the respondents have again submitted the documents which were earlier submitted before the adjudicating authority in support of their submissions that there was no short receipt of goods. They have also submitted a statement of reconciliation of the quantities earlier received short which were subsequently supplied by the railways to them after relocating the tanks/wagons. The statement is invoice-wise and it is found from this statement that there has been no short receipt of the oils. Therefore, the allegation of the department that there was short receipt of Oils procured without payment of duty from IOC under chapter X procedure is without any evidence and is not proved. The findings of the adjudicating authority i....