TaxTMI 
TaxTMI 
2025 (10) TMI 822
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....ER: A.K. JYOTISHI] The Department has come in appeal against Hindustan Petroleum Corporation Ltd., (HPCL) in Appeal No. C/367/2008, Bharat Petroleum Corporation Ltd., (BPCL) in Appeal No. C/30689/2018 and Indian Oil Corporation Ltd., (IOCL) in Appeal No. C/30690/2018 (hereinafter referred to as respondents). 2. The case of the Revenue is that these respondents had imported LPG (Butane) under Customs Notification No. 21/2002-Cus dated 01.03.2002 as substituted vide Notification No. 37/2005-Cus dated 02.05.2005, whereby, the effective rate of customs duty was "Nil" on the LPG imported for supply to domestic consumers at subsidised price under Public Distribution System (PDS) (impugned goods). The Department came to know that they have n....
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....penalty under Section 114A and 112 of Customs Act 1962. The Department has mainly contested the impugned order passed by the Adjudicating Authority on the following grounds: a) The Adjudicating Authority's understanding of the expression used in the notification and his conclusion that the expression "for use" must be construed as "intended for use" and not actually used, is not proper and legal. b) The conclusion of the Adjudicating Authority that FIFO method need not be followed is also not correct as the importer is not maintaining any record to show that at any particular point of time the quantities of imported and indigenous stocks were known. 3. The brief background of this issue is that due to certain shortage o....
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....g in view FIFO method according to Learned AR, but disputed by the Advocate for the Respondents. 5. As a counter to the argument made by Learned AR and grounds taken by the Department, the Learned Advocate appearing on behalf of the three respondents submits that the Department case is based on erroneous calculation in the first place in the sense that while the Department had alleged that they have not followed any method and maintained common account and therefore it was proposed that FIFO method should not be adopted for demanding duty, whereas, in the computation of quantity, the mode and method followed itself is based on FIFO method. Secondly, he has argued that the respondents were having ERP system, where they had a very systemat....
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....nt company, there cannot be any intent to evade duty. Thus, invocation of extended period as well as imposition of penalty would not sustain otherwise also in this matter. He further highlights the fact that the notification in question is not having any specific end use condition and therefore, it is to be interpreted in terms of the notification itself. 6. The issue involved in all the three appeals filed by the Department are identical, as also the arguments taken by the Learned Advocate on their behalf being similar in all the three appeals, we propose to take up all these three appeals together and disposed by way of common order. 7. Heard both the sides and perused the records. 8. The question to be decided is whether the Adj....
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....or the Department that it was supposed to be sold for PDS by them at the port itself at the time of imports. Therefore, the intention was always to ultimately prove that whatever has been imported has been actually used for the PDS purposes or otherwise. The only dispute, therefore, is the mode of arriving at this conclusion as to whether it was used for said purpose only and not used for any other purpose. We find that the Department has taken in to account certain quantity like pending balance, receipt from refinery, receipt from vessel etc., to arrive at total receipt on daily basis and has also adopted the quantity used/cleared on that day and thereafter, taking the total of pending balance and domestic procurements arrived at certain p....
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....d also to be a reasonable basis for arriving at the correct quantity of imported LPG having used for PDS purpose or not. If based on this, it is established that it has not been used for PDS purpose on per day basis or during a reasonable period, depending on the practice followed, it would be obvious that the imported goods have not been used in accordance with the condition of the exemption notification on plain reading and strict construction of same. 11. In so far as the issue of limitation and penalty is concerned, as argued by the Learned Advocate for the respondents, we find that these are not the grounds which can the taken up by them now as they have not filed any cross appeal and it is only by way of argument that they are maki....