Customs, Excise and Gold Tribunal - Bangalore
Senior Depot Manager, Indian Oil ... vs The Commissioner Of Customs And Central ... on 3 December, 2007
Equivalent citations: 2008(224)ELT335(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. The appellant is a PSU Unit. They have obtained clearance Certificate from the Committee of Secretaries to pursue this matter. This appeal arises from the Order-in-Original No. 05/2005-CE dated 23.02.2005 passed by the Commissioner of Customs & Central Excise, Tirupathi.
2. The appellants are manufacturers of Ethanol Blended Petrol (hereinafter referred to as EBP) falling under Chapter heading 2710. The said EBP is a blend of 95% Motor Spirit (commonly known as Petrol) and 5% Ethanol, which is also known as Ethanol Doped Petrol.
3. Revenue, after due investigation, proceeded against the appellants and found that the assessee had cleared 6,56,000 Litres of EBP valued at Rs. 1,94,26,516.36 without payment of appropriate duty of Excise totaling to Rs. 99,81,396/- which includes, SED, AED and SAED for the period from 01.07.2004 to 03.08.2004. The appellants contested the matter on the ground that the said clearances were not dutiable for various reasons. They also claimed the benefit of Notifications 06/2002-CE dated 01.03.2002 read with 38, 39 & 40/2004 dated 04.08.2004 and also 25/2006 dated 20.11.2006. However, the Commissioner has not agreed with their view including the plea taken by them with regard to the demands being barred by time, as there was no suppression of facts. The appellants unit was under control of the Excise. The Commissioner has taken a view that there was no Notification for the interregnum period 01.07.2004 to 03.08.2004, which grants exemption to the assessee and, therefore, the amounts were confirmable. The appellants made a representation to the Government for granting exemption for the interregnum period and the Government, after due consideration, has issued Notification under Section 11C of the Central Excise Act exempting duty for the interregnum period. The 11C Notification is No. 25/2006(NT) dated 20.11.2006, which is reproduced herein below:
Notification: 25/2006-C.E. (N.T.) dated 20-Nov-2006 Petrol - 5% ethanol blended petrol - Exemption during 1-7-2004 to 3-8-2004 Whereas the Central Government is satisfied that according to a practice that was generally prevalent regarding levy of duties of excise (including non-levy thereof) namely (i) the duties of excise leviable under Section 3 of the Central Excise Act, 1944 (1 of 1944), (ii) the additional duty of excise leviable under Section 111 of the Finance (No. 2) Act, 1998 (21 of 1998), and (iii) the special additional excise duty leviable under Section 147 of the Finance Act, 2002 (20 of 2002), on 5% ethanol blended petrol that is a blend consisting by volume, of 95%. Motor spirit (commonly know as petrol) and 5% ethanol, and confirming to Bureau of Indian Standards specification 2796, falling under heading No. 27.10 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which was liable to duties of excise but according to the said practice, the duties of excise were not being levied during the period commencing on the 1st day of July, 2004 and ending with the 3rd day of August, 2004.
Now, therefore, in exercise of the powers conferred by Section 11C of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby directs that the whole of the duties of excise payable under the aforesaid Acts, on such 5% ethanol blended petrol but for the said practice, shall not be required to be paid in respect of such 5% ethanol blended petrol on which said duties of excise were not being levied during the period aforesaid, in accordance with the said practice only if the appropriate duties of excise have been paid on 95% Motor spirit (commonly known as petrol) and 5% ethanol used for blending to obtain such 5% ethanol blended petrol.
Explanation: For the purposes of this exemption "appropriate duties of excise" shall mean the duties of excise leviable under the First Schedule and Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), the additional duty of excise leviable under Section 111 of the Finance (No. 2) Act, 1998 (21 of 1998), and the special additional excise duty leviable under Section 147 of the Finance Act, 2002 (20 of 2002), read with any relevant exemption notification for the time being in force."
4. The learned Consultant submits that in view of the above Notification, which has been issued by the Government under Section 11C of the CE Act, the question of confirming duty and penalty does not arise.
The learned SDR, after due perusal of the Notification, submitted that the Notification will apply to the facts of this case and for the period in question.
5. On a careful consideration, we notice that the impugned goods were exempted from duty and the same was being cleared from the assessee's factory without payment of duty. This fact was known to the department. Therefore, even on limitation, the appellants have a strong case and demands are required to be set aside. However, for a short period, there was no Notification, which led the Department to issue Show Cause Notice for recovering the amount. Further, the Government has accepted the assessee's plea to waive the duty under Section 11C of the Central Excise Act by the above stated Notification No. 25/2006 dated 20.11.2006. In view of this Notification, the demands are not sustainable. Therefore, the said demands are set aside by allowing the appeal with consequential relief, if any. The stay application is also disposed of.
(Pronounced and dictated in open Court)