Custom, Excise & Service Tax Tribunal
M/S Bharat Petroleum Corporation Ltd vs Commissioner Of Central Excise, Nashik on 19 February, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/84/09 (Arising out of Order-in-Original No. 33/CEX/2008 dated 21.10.2008 passed by the Commissioner of Central Excise, Nashik). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Bharat Petroleum Corporation Ltd. Appellant Vs. Commissioner of Central Excise, Nashik Respondent Appearance: Ms. Aparna Rao, Advocate for Appellant Shri Ahibaran, Addl. Commissioner (AR) for Respondent CORAM: SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 19.02.2014 Date of Decision: 19.02.2014 ORDER NO. Per: P.R. Chandrasekharan
The appeal is directed against Order-in-Original No. 33/CEX/2008 dated 21.10.2008 passed by the Commissioner of Central Excise, Nashik. Vide the impugned order, a duty demand of Rs.37,56,181/- has been confirmed against the appellant M/s Bharat Petroleum Corporation Ltd. along with interest thereon for violating the terms and condition of Notification No. 28/2002-CE dated 13.5.2002.
2. Briefly stated facts of the case are as follows: -
2.1 M/s Bharat Petroleum Corporation Ltd. is a manufacturer of petroleum products and they supplied motor spirit for blending with ethanol by availing the concessional rate of duty prescribed under Notification No. 62/2002-CE as amended. The said concession was available subject to the condition that the motor spirit supplied is intended for use in the manufacture of Ethanol Blended Petrol (EBP) consisting of 95% of motor spirit and 5% of ethanol and such ethanol blended petrol confirmed to BIS Specification 2796. The manufacturer/supplier was also required to follow the procedure laid down in Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. The appellant availed this concession and made supply to various parties namely, IOCL, Manmad & Shirud; IBP, Manmad; BPCL, Akolner & Karari; and HPCL, Gaigaon depot. A show-cause notice was issued to the appellant stating that out of a total quantity of 40707.85 KL of Motor Spirit so supplied, the appellant did not satisfy the end-use criterion and accordingly, there was a short payment of duty to the extent of Rs.1,22,12,356/-. The appellant contested the demand and produced evidence as to the usage of motor spirit supplied by them for blending with ethanol and after considering the submissions made, the adjudicating authority reduced the demand to the extent of Rs.37,56,181/- along with interest thereon on the ground that in respect of a quantity of 1256.2 KL of motor spirit, the appellant was not able to satisfy the end-use condition and, therefore, they are liable to discharge the differential duty liability. Aggrieved of the same, the appellant is before us.
3. The learned Counsel for the appellant submits that these demands pertain to their depots at Akolner & Karari and supplies made to IOCL, Manmad & Shirud and HPCL, Gaigaon. It is their contention that they had submitted before the lower authorities the invoices issued for ethanol blended petrol cleared from these premises and, therefore, the impugned demands are not sustainable. It is also stated that they had submitted copies of the application for removal and receipt various buyers of the product and also in some cases, an Annexure-II statement submitted by the buyers with respect to the usage of motor spirit for blending with ethanol. However, these documents have not been appreciated by the department and had they been appreciated, the demand would not survive. Accordingly, it is pleaded that the order be set aside and appeal allowed.
3. The learned Addl. Commissioner (AR) appearing for the Revenue reiterates the findings of the adjudicating authority.
4. We have carefully considered the submissions made by both sides.
4.1 The entire clearance of motor spirit for blending with ethanol is governed by the Procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. As per Rule 6 of the said Rules it is the recipient/buyer of the goods, who has to lead evidence with respect to the intended usage and not the supplier of the goods and if the recipient/buyer has not informed to the excise authority, they are liable to discharge differential duty liability along with interest. Therefore, in respect of the supplies made to IOCL and HPCL, the responsibility and liability to discharge the differential duty liability lies with those units and not with the appellant, who is only the supplier of the goods.
4.2 As regards the appellants own depots, they have to lead evidence with respect to usage of Motor Spirit in blending with ethanol and such ethanol blended petrol satisfies the BIS standards. Rule 5 of the said Rules prescribes the accounts to be maintained and also the returns required to be submitted by the recipient of the goods. The account prescribed is simple account indicating the quantity and value of the Motor Spirit received, quantity consumed and the quantity remaining invoice-wise and the monthly returns is to be submitted as per the formate prescribed in AnnexureII. The AnnexureII is very simple statement required to be submitted month-wise indicating the opening balance, receipt, quantity consumed, closing balance and the goods manufactured i.e ethanol blended petrol. Once this document is submitted, it is for the excise authorities to verify the details and ensure that the condition of notification is satisfied. From the record, it is not clear to us whether extracts of the simple account and Annexure-II were filed by the depots of the BPCL month-wise in respect of the motor spirit supplied during the period mentioned in the show-cause notice. Therefore, the matter has to go back to the adjudicating authority to consider the matter afresh subject to the appellant furnishing the extracts of the simple account maintained by them and the copies of the returns (in Annexure-II) for the various months mentioned in the show-cause notice. On such submission, the details can be verified by the excise authorities and if it is found that the appellant has not utilized the motor spirit for the intended purpose, the differential duty liability has to be determined on the basis of such reports.
4.3 The Counsel for the appellant submits that they will be able to furnish the above details to the adjudicating authority within a period of two months from today and it is ordered accordingly. On such submission, the adjudicating authority shall reconsider the matter afresh and pass a speaking order after giving a reasonable opportunity of hearing to the appellant.
5. Thus, the appeal is allowed by way of remand.
(Dictated and pronounced in Court)
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha
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