2015 (12) TMI 1003

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....warehouse for storage of petroleum products like Motor Sprit (MS), High Speed Diesel Oil (HSD) adn Superior Kerosene Oil (SKO) falling under Chapter 27 of the CETA, 1985. They have received non-duty paid petroleum products and discharged duty from warehouse as per Rule 20 of the CRR, 2002. The petroleum products are received through pipelines. They transfer the products through pipeline in a specific sequence ie SKO-MS-SKO-HSD-SKO-MS and they are pumped through the pipeline from one product to another. While changing of products, there is always mix-up of products either MS-SKO or HSD-SKO. After testing the interface quantity, the same was either upgraded or downgraded and accordingly, cleared the same on payment of duty. The appellants hav....

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.... order. Further, he submits that duty is payable on the excisable goods only on removal. Therefore, at the time of removal, whatever applicable rate of duty on the value has to be paid only on removal. Therefore, the rate of duty for assessing the goods is only at the time of removal from the warehouse. He also submitted a copy of the test reports of interface quantity tested in their BPCL laboratory. Only after the receipt of the test reports, they either downgraded or upgraded the intermingled products. Since, the test report confirms HSD specification, the said quantities of intermix was downgraded and cleared on payment of duty. Further, he submits that in petroleum industry in case of mixture of petroleum products, the product is downg....

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....ect of two of the intermingled/ interfaced quantity, the appellants have already upgraded it. Whereas, in the case of 886.65 kiloliters of interfaced quantity, wherein 50% of MS and 50% of SKO are intermixed, either downgraded or upgraded by the appellants based on the test report of the samples drawn from the intermingled products. It is tested in their own laboratory. On receipt of the test reports, the intermixed product is transferred to the respective main tank containing HSD or MS oil. We also find that the interface quantity is received separately and stored in slop tanks only after the testing and depending upon the report, these goods are transferred to the respective main tank and thereafter cleared on payment of excise duty. On p....