Final Order Nos. A/752-753/2011-WZB/C-II(EB) arising from in Appeal Nos. E/2166/2001 and E/1116/2002. Case: Indian Oil Corporation Ltd. Vs Commissioner of C. Ex., Mumbai-II. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)
| Case Number | Final Order Nos. A/752-753/2011-WZB/C-II(EB) arising from in Appeal Nos. E/2166/2001 and E/1116/2002 |
| Counsel | For Assessee: Shri M.H. Patil, Advocate and For Department: Shri Navneet, SDR. |
| Judges | Shri P.G. Chacko, Member (J) and P.R. Chandrasekharan, Member (T) |
| Issue | Central Excise Rules, 1944 - Rule 57A |
| Citation | 2013 (292) ELT 210 (Tri. - Mumbai) |
| Judgement Date | July 28, 2011 |
| Court | CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal) |
Order:
P.G. Chacko, Member (J), (West Zonal Bench At Mumbai)
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Indian Oil Corporation Ltd. (IOCL), have two units at Trombay, one referred to as ''blending unit'' where petroleum products like lubricating oil are manufactured by blending the base mineral oils with additives and another one referred to as ''packing unit'' where the said products are canned in small tin containers. The period of dispute is from August, 1994 to November, 1996. Till 12-9-1995, the units were covered by a single registration with the department. With effect from 12-9-1995, the blending unit alone was retained in the registration certificate; the other unit was separated and given separate registration as dealer/depot. During the entire period, the activity of IOCL consisted of blending and sending the blended product in bulk from the blending unit to the other unit, packing it in small containers in the latter unit and marketing the final product. The small tin containers required for this purpose were received directly in the packing unit from the manufacturers thereof and these were used as input and Modvat credit of the duty paid thereon was availed. This happened during the entire period. In a show cause notice dated 9-6-1999, the department alleged that IOCL had availed inadmissible Modvat credit on the tin containers during the aforesaid period amounting to Rs. 2,46,84,459/- by suppressing the fact that the said containers (input) had been received in their packing unit instead of in their factory premises (blending unit). It was alleged that this fact was suppressed with intention to avail inadmissible Modvat credit. It was particularly alleged that IOCL had misled the department by filing a declaration on 26-3-1994 under Rule 57G to the effect that the tin containers were received in their factory premises. On this basis the extended period of limitation was invoked and the entire Modvat credit on the input was proposed to be disallowed and recovered under Rule 57-I of the Central Excise Rules, 1944. Interest on duty was demanded under Rule 57-I(5) and penalty was proposed under Rule 57-I(4). These proposals were contested. In adjudication of the dispute, the learned Commissioner passed the impugned order, the operative part whereof is reproduced below:-
"I confirm that the Modvat credit of Rs. 2,46,84,459/- for the period August 94 to November 96 on small tin containers received in their SCFP but availed of at their manufacturing premises was inadmissible to them and, therefore, required to be recovered from the assessee company. The assessee has paid such inadmissible Modvat credit for the period September 95 to November 96 to...
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