2013 (6) TMI 683

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....2 certificate issued by the Superintendent Central Excise, Range-Uran II, Panvel as per the provisions of Rule 20 of the Central Excise Rules, 2002. During the course of scrutiny of Annexure-A for the month of December 2007 to November 2008 and re-warehousing certificates received from Range Superintendent and submitted by ONGC, it was noticed that 655.866 M.T. (out of total quantity of 190386 M.T. dispatched from Hazira) of Naphtha was received short at the place of re-warehousing. The total differential duty involved in such short received quantity of 655.866 MT was worked out as Rs. 43,15,964/-. The original authority confirmed the demand of duty on the grounds (a) that as per Para 2(iii) of C.B.E. & C. Circular No. 804/1/2005 CX., dated 4-1-2005, no abatement with regard to any losses subsequent to removal from the refinery would be allowed and that the said Circular also clarified that no storage loss are permitted in the export warehouse, (b) Rule 20(4) of the  Central Excise Rules, 2002 provides that if the goods dispatched for warehousing or re-warehousing are not received in the warehouse, the responsibility of duty shall be on the consignor. 3. Being aggrieve....

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.... upon such intention. The two circulars on which the Commissioner (Appeals) placed reliance do not provide any abatement with regard to any losses subsequent to removal from refinery. Therefore, the Commissioner (Appeals) has erred in interpreting "had the Board intended to deny any transit loss, specific provision could have been made in the statutory circulars". This is nothing but mere presumption, which has no locus standi in interpretation of fiscal statute. 4.3 The C.B.E. & C. Circular No. 804/1/2005-CX., dated 4-1-2005 dealt with the export warehousing under Para 6.3, wherein it is made clear that no storage losses are permitted in the export warehouses/tanks whether intermediate or at AFS including those with such mixed storage. In that view also, the Commissioner (Appeals) has wrongly concluded that the said circular does not deal with the export warehousing. 4.4 The Commissioner (Appeals) has relied upon the decision in the case of CCE, Chennai v. Bhuwalika Steel Ltd. [2010 (249) E.L.T. 218 (T-B)], which dealt with the credit of duty paid on the inputs or capital goods. Under the said case, the Tribunal was pleased to allow tolerances in respect of hygrosc....

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..... Government has carefully gone through the relevant case records and perused the impugned Order-in-Original and Order-in-Appeal. 7. Government notes that the applicant cleared Naphtha under CT-2 to their export warehouse in terms of Rule 20 of Central Excise Rules 2002. The original authority observed that they received 655.866 MTs quantity of Naphtha short at their export warehouse and duty involved in such shortage was of 43,15,964/-. The original authority held that as per para 2(iii) of the C.B.E. & C. Circular No. 804/1/2005-CX., dated 4-1-2005, no abatement of duty is available for any loss subsequent to removal from refinery and hence, the respondent is liable to pay duty in terms of Rule 20(4) of the Central Excise Rules, 2002. Accordingly, original authority confirmed the demand of duty. Commissioner (Appeals) decided the case in favour of the respondent. Now, the applicant department has filed this revision application on ground mentioned in para (4) above. 8. Government observes that the original authority has held that the applicant has violated the condition 2(iii) of the Board's Circular No. 804/1/2005-CX, dated 4-1-2005 and hence liable to pay d....

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.... the facility of removal of specified petroleum product was withdrawn. But, the facility of removal of specified petroleum products from the production to export warehouse without payment of duty as stipulated in Notification No. 46/2001-C.E. (N.T.) has not been withdrawn, and the Notification 46/2001-C.E. (N.T.) continued to be in existence. 8.4 The Circular No. 804/1/2005-CX., dated 4-1-2005 was issued to clarify some issues after withdrawal of warehouse facility of specified petroleum product by way of Notification No. 17/2004-C.E. (N.T.), dated 6-9-2004. The relevant portion of the said circular dated 4-1-2005 is reproduced as under :-  "I am directed to say that as you are aware the facility of removal of specified petroleum products without payment of duty from the factory of production to a warehouse or from one warehouse to another warehouse was withdrawn w.e.f. 6th September, 2004 vide Notification No. 17/2004-C.E. (N.T.), dated 4th September, 2004. The facility of removal of petroleum products without payment of duty for export warehousing continues to be available vide Notification No. 46/2001-C.E. (N.T.) dated 26th June, 2001. Board vide Circular No. 581....