TaxTMI 
TaxTMI 
2010 (2) TMI 841
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.... AAACH1118BXM023 are manufacturers of Petroleum products falling under Chapters 27, 28 and 29 of Central Excise Tariff Act, 1985. They are also availing CENVAT Credit on inputs and Capital goods under Rule 3 of Cenvat Credit Rules, 2002. 2.2 M/s. HPCL (VR) are in a practice of filing a "Cumulative loss statement of storage loss" every month. On verification of the statement filed by the assessee relating to the month of May, 2000, it is noticed that 13.012 Kl of mineral Turpentine Oil found deficient and works out to 1.8% of the quantity handled, whereas the permissible limit of such loss is 0.5% and the assessee have not satisfactorily accounted for the said quantity. 2.3 In view of the above a Show Cause Notice vide C.No. ....
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....l in turn received JBO only from Visakh Refinery and there are no other source of receipt for Visakha Terminal. Thus there are no other purchaser for the Visakh Refinery and there is no other seller for Vasakh Terminal. These movements of MTO to Visakha Terminal were being made under bond covered by AR3A and based on the receipt figure from the Visakha Terminal duly intimated to Department under D-3, the losses are arrived at and excess of such losses have been booked by the Central Excise and the duty has been demanded thereon. 4.2 The losses as mentioned in Para No. 1 above can be read in connotation to para 69 of the Petroleum Manual which states "Losses in storage, pipeline deliveries and transit losses during in bond removal....
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.... in the Visakha Terminal in the same month. This operational gain has arisen due to sale of the full quantity received from VR even though receipt figures has been subjected to human error of showing less receipt. 4.3 The Hon'ble CESTAT while giving decision in IOC's case - 1993 (66) E.L.T. 481 (Tri. - Cal.) has stated that they go behind the rationale of losses and has observed that quarterly balancing system should be adopted even though losses were sustained before the introduction of Board Circular of quarterly balancing system and condoned the losses due to natural causes and to overcome certain hardship faced by the assessee. In the subject case, the actual reason of the losses sustained as mentioned in Para 2 above was due to....
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....AB, since such duty has to be computed after allowing condonable percentage of transit losses and higher percentage are also allowed based on specific circumstances of each case, the duty liability crystalizes only upon quantification of the demand administering the condonable percentage. Therefore, since the condonable limit is hereby asked for reconsideration based on the material fact of this particular case, which merits for higher percentage, interest, if any, shall be computed subject to the decision given for allowing higher limit as requested. 5. The case was listed for personal hearing on 16-9-09 which was attended by Sh. M. Ananth Krishnan, Chief Manager, Finance on behalf of the applicant and reiterated the grounds of rev....