Case Law Details

Case Name : Indian Oil Corporation Ltd. Vs. Union of India (High Court of Bombay)]
Appeal Number : [(2014) 52 294
Date of Judgement/Order :
Related Assessment Year :

Supply of aviation fuel to foreign going aircraft from fuelling Station registered as warehouse is eligible for rebate

Indian Oil Corporation Ltd. (the Petitioner) had procured Aviation Turbine Fuel (ATF or the fuel) from the refinery of Bharat Petroleum Corporation Ltd (BPCL) on payment of Excise duty. The fuel was initially stored at the terminal and thereafter it was sold at NITC, IGI Airport, Delhi. A part quantity of ATF purchased from the BPCL was for supply to the foreign going aircraft. The safety requirements and lack of space at airport permits storage facility to BPCL at IGI Airport, New Delhi.

In this case, ATF was purchased from BPCL and part of it was sold to BPCL itself. The other part of ATF acquired from BPCL was sold to foreign going aircraft. The Petitioner obtained a joint certificate and thereafter proceeded to lodge a claim for refund of Rs. 10,93,745/- under Rule 18 of the Central Excise Rules, 2002, being the duty paid on ATF supplied to foreign going aircraft, from NITC, IGI Airport, Delhi, Aviation Fuelling Station, Delhi (AFS).

However, the refund claim was rejected on the ground that export was not directly from factory/ warehouse violating condition in Para 2(a) of the Notification No. 19/2004-CE (NT) dated September 6, 2004 (the Notification). On appeal being filed to the Commissioner of Central Excise (Appeals), the same was dismissed on June 21, 2006.

Thereafter, a Revision Application was filed before the Joint Secretary to the Government of India which has been rejected vide the Order November 11, 2009. Being aggrieved, the Petitioner filed a Writ Petition before the Hon’ble High Court of Bombay.

The Hon’ble High Court held as under:

  • The Petitioner had supplied the fuel to aircrafts on foreign run by transferring duty paid products to the AFS (Mumbai-Delhi) which has been registered as a warehouse of Excisable goods. Hence, condition in Para 2(a) of the Notification is satisfied;
  • Since the Excisable goods are exported after payment of duty directly from a factory or warehouse, then nothing more is required to be considered and verified;
  • The Department had not produced any document, which superseded the Notification or modifies or amends the same in any manner;

In terms of the above finding the Hon’ble High Court allowed the rebate claim to the Petitioner.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email:

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