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M/S. Indian Oil Corporation Ltd vs Commissioner Of Central Excise, ... on 28 April, 2015 cites

Hindustan Petroleum Corpn. Ltd. vs Union Of India on 6 September, 1995

2. Ld. Counsel for the appellants contention is that the department has prescribed a limit of 0.1% in respect of lubricated oil base stock vide Board Letter No. 11-A/6/70/CX.8 dated 30/4/1971. He further submits that these limits were prescribed when the warehousing provisions were applicable to the petroleum product and goods were moved from refinery to warehouse or from one warehouse to the other i.e. goods were non-duty paid. Ld. Counsel submits that these limits will not be applicable in relation to availment of Cenvat Credit, as Cenvat credit is availed on duty paid goods. Ld. Counsel submits that Honble Bombay High Court in the case of Hindustan Petroleum Corporation Ltd. Vs. Union of India[2012(286) E.L.T. 505(Bom)] has allowed 1 % transit loss and considered the same within the permissible limit. Ld. Counsel submits that in view of this 1% transit loss may be allowed.
Supreme Court of India Cites 2 - Cited by 14 - Full Document

Commissioner Of C. Ex. vs Bhuwalka Steel Industries Ltd. on 11 March, 2005

5. At the out set we note that demand confirmed is only for the normal period of limitation. The goods involved in the present case are lubricating base oil. Ld. Counsel for the appellant has produced copy of supplement to the manual of departmental instruction on excisable manufacture product. In the said manual different limit has been prescribed for different goods and different method of transfer etc. In the case of lubricating base oil the permissible limit is 0.1 %. We also note that Larger Bench of this Tribunal in the case of Bhuwalka Steel Industries Ltd(supra) has gone into details of various factors to be considered while permitting various losses on their receipt of the goods for purpose of availment of Cenvat credit under Rule 3(1) of Cenvat Credit Rules. We also note that the Commissioner in the impugned order has taken note of such factors and discussed in detail the relevance or irrelevance of each of the five factors enumerated in the larger bench decision. In nutshell, the conclusion is that Cenvat credit availed and utilized on short receipt of base oil in excess of 0.1% is not permissible. We do not find any thing wrong in the said findings. In our view the said limit is in accordance with the instruction issued by the Central Board of Excise and Customs on the subject. We also agree with the Ld. A.R. that the limits will not be different in case of movement of goods which are duty paid or movement of goods which are non duty paid. Such losses will not depend upon duty paid or non duty paid nature of goods but will upon the inherent nature of the goods. We therefore reject the contention of the Counsel of the appellant that the limits prescribed are applicable only for non duty paid goods. Another contention of the Ld. Counsel was that even though the Commissioner has held that the duty is recoverable for the quantity in excess of 0.1 % permissible limit. However the Commissioner has not extended benefit and confirmed total amount. We find that basic excise duty without benefit is Rs. 9,39,250/- + ES+ SHES. Amount confirmed is less than this amount. However, computation details are not given. Appellant may compute after taking benefit of 0.1% permissible limit and pay the differential amount and interest. If the said amount is less than amount confirmed they may inform Commissioner, who would accept the details or provide the computation details. We also note that equal amount of penalty has been imposed under Rule 15(1) of Cenvat Credit Rules, 2004. Keeping in view the nature of the dispute and the fact that earlier department has allowed such losses; we do not consider it a fit case for imposition of penalty under Rule 15(1) of Cenvat Credit Rules, 2004, penalty imposed is therefore set aside. The appeal is disposed of in above terms.
Customs, Excise and Gold Tribunal - Tamil Nadu Cites 10 - Cited by 1 - Full Document
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