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CENTRAL EXCISE CESTAT Cases

Central Excise – Storage of Motor Spirit and HSD - Remission of duty on Storage loss - On account of maintenance and upgradation of plant and refinery, appellate stored Motor Spirit and HSD outside the refinery premises for which the appellant have obtained permission from the Commissioner subject to condition that no remission of duty shall be permitted against loss of HSD and MS during handing, transit, storage or in the case of accident or natural calamity or whatsoever – appellant stored HSD in a vessel without payment of duty pursuant to permission granted by the Commissioner, however, the quantity of HSD received back in the storage tanks was found to be lower - The appellant paid the excise duty on the said volume difference – subsequently, appellant filed the refund claim for the duty erroneously paid on the ground that there was no actual loss of quantity of goods – Asst. Commr. rejected the refund claim holding that the word ‘whatsoever’ in condition of the Commissioner’s letter was wide enough to cover the expansion and contraction of the hydrocarbon fuels – Commr. (Appeals) supporting the order of the original authority upheld the same – hence, this appeal – HELD – The difference in quantity pointed out by the department is not of the physical shortage but due to contraction in the petroleum goods which occurs due to difference in the temperature – the fact that the petroleum product gets contracted is not under dispute - Board Circular also admitted that due to temperature variation, the petroleum product gets contracted and due to which there is variation in the quantity of the same quantum of the goods between one temperature and other temperature - In the present case, the weight of the product remains unchanged or very minor difference as compared to the difference shown in K15 and KL of a liquid product which obviously varies at a time of a particular temperature and at different time at a different temperature - when the total quantity of goods in weight is same and the quantity in KL varies at different time due to different temperature, there is absolutely no case of shortage or loss of the goods – From para 2(v) of Commissioner’s letter it is clear that if there is physical loss due to handling, transit, storage or in case of accident or natural calamity or whatsoever, no remission shall be permitted - In the present case, the quantity remains the same, the variation in KL is only due to density of the goods that due to different temperature at the time of loading and unloading therefore, it cannot be said that there is any loss of quantity of the goods consequently, there is no violation of para 2(v) of the said letter - since there is no loss at all, there is no question of seeking remission therefore, the process of remission of duty is not relevant in instant case - the duty paid by the appellant is required to be refunded to the appellant - As regard unjust enrichment, the amount of refund shown as received in appellant’s books of accounts therefore, they have satisfied that the incidence of refund amount has not been passed on to any other person - the impugned order is set aside and appeal is allowed
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