TaxTMI 
TaxTMI 
2014 (2) TMI 324
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....vals were Rs. 3,85,74,452/- and Rs. 4,05,34,500/- respectively. The said notification granted exemption to "goods supplied as stores for consumption on board a vessel of the Indian Navy or Coast Guard". Investigation conducted revealed that HSD was sold by HPCL to IOCL on commercial sales basis and the appellant had not received any orders from the Indian Navy and it was IOCL who subsequently sold the same to Indian Navy. Therefore, the department was of the view that the appellant is not eligible for the benefit of duty exemption and accordingly issued two show-cause notices dated 25-9-2007 and 1-8-2008 proposing to deny the benefit of the exemption and recover duty thereon along with interest and to impose penalty on the appellant. The said notices were adjudicated vide the impugned orders and the duty demands were confirmed along with interest and a penalty of Rs. 5 lakhs and Rs. 10 lakhs was imposed on the appellant. Aggrieved of the same, the appellant is before us. 3. The ld. Counsel for the appellant made the following submissions. (1) Prior to 6-9-2004, the appellant used to clear petroleum products to the warehouse of IOCL without payment of duty and from the warehouse o....
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....he previous arrangement. In some cases, the oil installation are dedicated for a particular end user through which supply of petroleum products takes place whereas in other cases, the oil installation may cater to more than one end-users. In such situations, at the time of removal from refinery, the refinery may not know as to which particular consignment under clearance will eventually be supplied under end-use based exemption. Decision : In case at the time of removal of petroleum products, the refinery its unable to identify the consignment which would ultimately be received by an eligible ed user, they can opt for Provisional Assessment indicating appropriate reasons before the Deputy/Assistant Commissioner. While applying for provisional assessment, the refinery may be required to undertake the following: (i) The consignment reaching the prescribed end-user shall be deemed to be relatable to the earliest clearance under Provisional Assessment under an end-use based exemption. (ii) The refinery shall supply the complete and relevant information latest within a fortnight of delivery of the goods to a prescribed end user. (i....
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.... 20 with the modification that in case of Aviation Turbine Fuel intended for supply for foreign going aircrafts and other petroleum products i.e. FO/LDO/HSD intended for supply as Bunker Fuel to foreign going vessels the goods may also be received through dedicated tanks in intermediate storage of goods cleared for export warehouse. For the removal of doubts, it is clarified that mixed bonding of duty paid goods with non-duty paid goods is not permitted at such intermediate storage installation." Further, in view of difficulties in installing separate tanks at the airports, mixed storage of duty paid and non-duty paid goods at Aviation Fuel Station (AFS) at airports may be allowed subject to the condition that a tank-wise regular account shall be maintained about the receipt and discharge of duty paid and non-duty paid stocks of ATF. Accordingly, the following sub-para is added in para 6 of said circular. "6.3 The Commissioner of Central Excise having jurisdiction over the warehouse may permit the registered person of the warehouse to store duty paid excisable goods or duty paid imported goods along with non duty paid excisable goods in the warehouse sub....
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....ed for grant of exemption to fuels procured by IOCL 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 subject to certain conditions. These amendments are procedural in nature and they should be given retrospective effect. In the light of the above, it is pleaded that the appeals be allowed. 4. The ld. Commissioner (AR) appearing for the Revenue strongly opposes the contentions raised by the appellant and submits as follows:- (a) It is an admitted position as evident from the statements of the Manager (Excise) and Chief Finance Manager of the appellant firm that Indian Navy had not placed any orders with HPCL for supply of goods as stores for ships under exemption and M/s HPCL had sold the goods to IOCL as a normal commercial transaction on a principal to principal basis. Therefore, the condition for availing the exemption that the goods should be supplied as stores for consumption on board the vessel of the Indian Navy is not satisfied. (b) There are prescribed procedures for supply of stores on board the vessels of Indian Navy. As per the prescribed procedure, Indian Navy places an order on ....
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.... the Indian Navy 5.2 Subsequently, the said notification was amended vide Notification NO.37/2007-CE dated 1-11-2007 which inserted another entry which read as follows:- (1) (2) (3) "3A. Fuels falling under Chapter Heading 2710. 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 th....
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.... to the Cabinet Secretariat wherein the Ministry of Law had agreed with the view expressed by the Tribunal in the case of IOCL and had therefore, advised grant of permission by COD to agitate the matter before the Tribunal. The said letter is only an internal correspondence between two departments of the Government and cannot be considered as an aid to interpretation of statutes. In Doypack Systems (Pvt.) ltd. vs. UOI [1988 AIR 782 SC], the hon'ble apex court laid down the principle that if the provisions of the statute are not ambiguous, notings in the files of the Government are not relevant, as the statute ahs to be interpreted in terms of the language used therein. Therefore, notings made in the files of the Government cannot be a basis for interpretation of a statutory exemption. 5.4 In the IOCL case (supra) relied upon by the appellant, the facts were that IOCL purchased duty paid HSD-LSHS from M/s Reliance Industries and supplied the same to naval ships of the Indian Navy. Since clearance of the goods to naval vessels were exempt from duty under notification 64/95, the appellant filed refund claims seeking refund of duty paid by Reliance the incidence of which has been born....
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....or the manufacture of ships. That the said certificate would not be sufficient to extend the benefit of the notification as if the goods are supplied as stores for consumption on board of a vessel to the Indian Navy. 9. We agree with the view taken by the Tribunal. The words of the exemption notification are clear and unambiguous. Goods other than cigarettes are exempted from duty if the same are supplied as stores for consumption on board a vessel of the Indian Navy, Government of India under the Ministry of Defence for manufacture of warship in yard. As per notification the goods supplied to the ship builders will not qualify for exemption and only the goods supplied to the Indian Navy directly will qualify for the exemption. Holding thus, the hon'ble Apex Court dismissed the appeal as devoid of merits. The ratio of the said decision applies squarely to the facts of the case before us. 5.6 In the Moosa Haji Patrawala case also, while dealing with a similar situation, the Apex Court had held the same view in the context of notification No. 70/77-CE dated 7-5-77 which was also identically worded as notification 64/95-CE and which was the predecessor notification to ....