Remission available as variation is due to density of goods based on different temperature at time of loading unloading

Nayara Energy Ltd Vs C.C.E. & S.T.- Rajkot (CESTAT Ahmedabad)

CESTAT Ahmedabad held that remission of duty available as variation in KL is only due to density of the goods that due to different temperature at the time of loading and unloading.

Facts- The appellant stored HSD of 77061.703 K15/78603.629 KL/64030.568 MT in a vessel without payment of duty pursuant to permission granted by the Commissioner. The said HSD was returned to appellant’s factory premises however, the quantity received back in the storage tanks was 77087.208 K15/78247.414 KL/64029.721 MT was found.

The appellant’s explanation to the said difference was that this is on account of reduction in temperature between the months of October, 2018 and November, 2018 which resulted in contraction in the volume of HSD, the same was not on account of any actual or real loss. The appellant paid the excise duty of Rs. 49,26,453/- on the said volume difference of 356.215 KL between the loaded and unloaded HSD, the same was intimated to the jurisdictional Deputy Commissioner. Thereafter, the appellant filed the refund claim for the amount of Rs. 49,26,453/- erroneously paid on the ground that there was no actual loss of quantity of goods.

The appellant was issued a show cause notice dated 05.02.2019 proposing rejection of refund claim on the ground that as per para 2(v) of the Commissioner’s letter dated 03.10.2018, no remission of duty was permitted. The Assistant Commissioner rejected the refund claim. Commissioner (Appeals) dismissed the appeal of the appellant. Accordingly, the present appeal is filed.

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