Custom, Excise & Service Tax Tribunal
M/S. Chennai Petroleum Corporation Ltd vs Commissioner Of Central Excise, ... on 11 May, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/918/2006
(Arising out of Order-in-Appeal No.44/2006 dated 4.9.2006 passed by the Commissioner of Central Excise, Chennai)
For approval and signature:
Honble Ms. Jyoti Balasundaram, Vice President
Honble Dr. Chittaranjan Satapathy, Technical Member
1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
M/s. Chennai Petroleum Corporation Ltd. Appellants
Vs.
Commissioner of Central Excise, Chennai Respondent
Appearance S/Sh. R. Raghavan and M. Kannan, Counsel, for the Appellants Shri V.V. Hariharan, Jt. CDR for the Respondent CORAM Honble Ms. Jyoti Balasundaram, Vice-President Honble Dr. Chittaranjan Satapathy, Technical Member Date of Hearing: 11.05.2010 Date of Decision: 11.05.2010 Final Order No. ____________ Per Dr. Chittaranjan Satapathy Heard both sides. The appellant-public sector refinery removed the furnace oil from its Manali unit to its Nagapattinam unit following the warehousing procedure. The case records show that both the appellant-assessee and the departmental authorities were under the impression that furnace oil manufactured in the refinery at Manali can be moved duty-free to the unit at Nagapattinam, as both were deemed to be warehouses under the erstwhile Rule 140(2) of the Central Excise Rules. The Larger Bench in the appellants own case, vide CCE, Chennai Vs. Chennai Petroleum Corporation Ltd. 2008 (228) ELT 533 (Tri. LB), has held that with the introduction of the new Central Excise Rules in 2001 and 2002, refineries can no longer be deemed to be warehouses.
2. It is the contention of Shri R. Raghavan, learned counsel for the appellants that the impugned furnace oil was moved duty-free from Manali to Nagapattinam unit under the bonafide belief that both the refineries were warehouses and the warehousing followed was not objected to by the departmental authorities. He states that the appellant-public sector undertaking should not be penalized for moving the furnace oil duty-free when the departmental authorities also took no objection to such removal which was continuing over a long period of time from 1993 onwards as a regular practice. He also states that duty demand cannot also be sustained since the furnace oil moved to the Nagapattinum unit has been further processed and cleared in accordance with law.
3. Heard the learned Jt. CDR Shri V.V. Hariharan.
4. We take note of the fact that the appellant-public sector undertaking was under the bonafide belief that they could move the furnace oil produced in the Manali unit duty-free under the warehousing procedure to Nagapattinum unit and that the same could be processed, cleared on payment of appropriate duty therefrom. The departmental authorities also took no objection to this removal and in fact on a query from the Bench it is submitted by the learned counsel that the re-warehousing certificates were duly received at Manali and no action for non-warehousing has been initiated by the Department. We also take note of the submission made on behalf of the appellants that though the furnace oil has been initially cleared duty-free from Manali, the same has been processed / cleared on payment of appropriate duty under the law. This submission, however, requires to be verified by the original authority. Accordingly, we hold that this is not a fit case for imposition of penalty and hence we set aside the penalty imposed on the appellants and we also set aside the demand confirmed against the appellants and remand the matter to the original authority for causing verification of the appellants claim that the furnace oil moved to the Nagapattinum unit following the warehousing procedure has been processed / cleared on payment of appropriate duty. The demand against the appellant can only sustain to the extent the impugned furnace oil has not been disposed of without payment of appropriate duty under the law and not otherwise. The appellant shall be given a reasonable opportunity of hearing before passing a fresh order. The appeal is allowed by way of remand in the above terms and the penalty is set aside.
(Operative portion of the order was pronounced
in open court on completion of hearing)
(Dr. Chittaranjan Satapathy) (Jyoti Balasundaram)
Technical Member Vice President
Rex
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