2012 (9) TMI 457

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....er of Central Excise, Delhi-II. 2. Brief facts of the cases are that M/s. IOC Ltd., Bijwasan, New Delhi registered with Central Excise Department for warehousing of Petroleum products falling under Chapter 27 of Central Excise Tariff Act, 1985. During the month of April 2004, storage loss beyond the permissible limit of 0.5% (as prescribed by C.B.E.&C.) were occurred at M/s. IOC's premises for warehoused goods. The applicant neither paid any duty on it nor mentioned such losses in the monthly return which was beyond the permissible limit. Accordingly a Show Cause Notice dated 28-1-2005 demanding duty of Rs. 11,75,969/- was issued. The issue was decided by the Joint Commissioner, Delhi-II vide Order-in-Original dated 18-1-2006, where....

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....nsidered on a month wise basis. Therefore, the applicants submit that the losses are within the prescribed maximum of 0.5% in the various circulars. 4.3 It is well known that petroleum products are highly volatile and very susceptible to variation in temperature at different stages, whether at the time of decantation or lifting or exposure in storage etc., C.B.E. & C. from time to time has issued various guidelines in this regard for condonation of storage losses. Further Rule 21 of CER'02 also provides for remission of duty on goods lost/destroyed by natural causes. 4.4 Right since 1956 under various order of C.B.E.&C.'s like reference No. 26/23/CXM/54, dated 1-6-1956, such variation have been appreciated as mostly natural ....

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....ds and accordingly no demand is sustainable in the present case on losses, which were not removed at all. 4.8 In their own case the Hon'ble Tribunal has held that in the absence of definite evidence of clandestine removal no demand of duty can be raised. In this regard, reliance is placed on the decision of the Hon'ble Tribunal in the case of Indian Oil Corporation Ltd. v. C.C.E. reported in 2004 (163) E.L.T. 387 (T). A similar view has been taken in the case of India Forge and Drop reported in 2005 (183) E.L.T. 453 and in the case of Titawi Sugar Complex v. C.C.E. reported in 2004 (172) E.L.T. 119. 4.9 The department has not produced any evidence on record to prove the clandestine removal by the applicants. The applicants f....