Custom, Excise & Service Tax Tribunal
3 vs Represented By : Shri W Christian (Adv.) on 1 May, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad COURT Appeal No. : E/10354/2013-DB Application No. : E/STAY/10322/2013 Arising out of : OIO No 19/DEMAND/C.EX.COMMR/RC-1/2012 dated 18.12.2012 Passed by : The Commissioner (A), CE&ST., Vadodara I For approval and signature : Mr. M.V. Ravindran, Hon.'ble Member (Judicial) Mr. H.K. Thakur, Hon.ble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : Indian Oil Corpn Ltd., Represented by : Shri W Christian (Adv.) Respondent (s) : CCE&ST., Vadodara I
Represented by : Shri S K Mall (AR) CORAM :
Mr. M.V. Ravindran, Hon'ble Member (Judicial) Mr. H.K. Thakur, Honble Member (Technical) Date of Hearing/Decision : 1/5/2014 ORDER No. A/10969/2014 dtd1/5/2014 Per : Mr. H.K. Thakur, This stay application and appeal has been filed by the appellant with respect to OIO No 19/DEMAND/C.EX.COMMR/RC-1/2012 dated 18.12.2012 passed by Commissioner, Vadodara-I under which a demand of Rs 52,08,73,907/- has been confirmed against the appellant and penalty of Rs 50 lacs is also imposed.
2. Shri W Christian (Adv.) appearing on behalf of the appellant argued that this issue was earlier remanded by Cestat for proper reconciliation of the duty paid by the appellant as per order No. A/257/WZB/AHD/2011 and S/50/WZB/AHD/2011 dated 31.1.2011 in appeal No, E/419/2009. It was his case that as per Honble Tribunals directions Adjudicating Authority was asked to make reconciliation of such statements/submissions made by the appellant. Learned Advocate submitted that the appellant is supplying various petroleum products like Motor Spirits, Kerosene, Diesel Oil, Furnace Oil, Fuel Oil etc., though its following four pipe lines:
a) Koyali Ahmedabad Pipeline (KAPL)
b) Koyali Navgam Pipeline (KNPL)
c) Koyali Demand Pipeline (IOTL)
d) Koyali Viramgam-Sidhpur-Sanganer Pipeline (KVSSPL)
3. Learned Advocate submitted that the movement of petroleum products through the above pipelines is being done as per CBEC circular No. 663/54/2002-CX dated 23.9.2002 for the period April 2004 September 2005. Appellant regularly filed monthly ER-1 returns which was showing the quantity of petroleum products cleared to various destinations through railway wagons, truck, lorries and pipe lines. That the appellant had also filed the Annual Account statement of the petroleum products without payment of duty for the year 2004-2005 as per CBEC circular dated 23.9.2002 duly certified by the Chartered Accountant of the appellant. That the warehousing facility prescribed by CBEC under circular No. 663/54/2002-CX dated 23.9.2009 was withdrawn from the midnight of 5.9.2004 vide Notification No. 17/2004-CE (NT) dated 4.9.2004. That appellant had submitted the details of reconciliations alongwith losses that take place for transportation of petroleum products made by the appellant as transit losses. That after reconciliation of the clearance figures of petroleum products, appellant paid an amount of Rs 88.33 crores as differential duty with respect to the petroleum products on the midnight of 5.9.2004. It was also a case of the Learned Advocate appearing on behalf of the appellant that all the reconciliations made were produced before the Adjudicating Authority in remand proceedings as per EXB XII of the appeal paper book.
4. It was further argued by the Learned Advocate that inspite of all the details given to the Adjudicating Authority, he failed to appreciate the issue as per CBEC File No. 21/13/66-CX-III dtd 20.3.1967 and F No. 11A/9/70-CX.9 dated 27.3.1973. It was strongly emphasized that in view of these circulars the loss of one product can be offset against the gain in another product in the annual accounting statements which were reconcilable and condonable. It was further argued that though the earlier order passed by the Adjudicating Authority was remanded by this Bench as per Order dated 31.1.2011 but the Commissioner has again relied upon the findings of the earlier OIO dated 31.2.2008 in confirming the demands. It was his case that the case may be remanded to the Adjudicating Authority for proper reconciliation as per the statements made available by the appellant.
5. Shri S K Mall (AR) appearing on behalf of the Revenue argued that as per the findings of the Adjudicating Authority in Para 12.1 of the OIO dated 18.12.2012 no details were furnished by the appellant and the reconciliation of the clearance figures and the determination of duty could not be made. It was his case that the confirmation of demand and the penalty imposed has, therefore, been rightly done.
6. Heard both sides and perused the case records.
7. As the issue lies in a narrow compass, therefore, after allowing the stay petition the appeal itself is taken up for disposal. The issue involved in this proceeding is payment of differential duties on withdrawal of inbond movement of petroleum products without payment of duty after issue of Notification No. 17/2004-CE (NT) dtd 4.9.2004. It is the case of the appellant that reconciliation of various petroleum products for the purpose of payment of duty was done as per Notification No. 17/2004-CE and the differential amount of duty of Rs 88.33 crores was paid by the appellant. We observe from the case records that various procedures and reconciliation methods have been prescribed by CBEC from time to time as submitted by appellant. It is also observed from the EXB XII at Page 142 of the current appeal paper book that all the details/statements were submitted by the appellant. No specific findings have been given by the Adjudicating Authority on this reconciliation made as to why reconciliation made by the appellant are not acceptable. It is also observed from the findings in Para 12, 13.3, 13.4 and 13.6 of the impugned OIO dated 8.12.2012 that Adjudicating Authority has simply relied upon the earlier findings in adjudication order dtd 31.12.2008 which was set aide by the order dtd 31.1.2011passed by this Bench. It is improper to rely upon the findings of an adjudicating order which is no more existing. We are left with no other alternative but to set aside the OIO dtd 18.12.2012 passed by the Adjudicating Authority and remand the matter to him with a direction to pass an order on the facts of this case by giving original findings. The appellant is also directed to submit fresh reconciliation details to the Adjudicating Authority in the remand proceedings. Needless to say that the Adjudicating Authority will afford an opportunity of personal hearing to the appellant for explaining their case before the issue is decided in denovo proceedings.
9. In view of the above observations, appeal filed by the appellant is allowed by way of a remand to the Adjudicating Authority.
(Operative part dictated in the Court)
( (M.V.Ravindran) (H.K. Thakur)
Member (Judicial) Member (Technical)
swami
2