ORDER
S.L. Peeran, Member (J)
1. The assessee is a PSU Unit. They have obtained clearance from the Committee of Secretaries for pursuing these appeals. These appeals arise from Order-in-original No. 11/2005 dated 8.4.2005 and Order in Appeal No. 264/2005 dated 10.11.2005.
2. The appellants had manufactured and removed certain quantity of Superior Kerosene Oil (SKO) and raw naptha used for flushing operations (FO), HSD and MS through pipelines situated outside the factory premises for the purpose of drainage. Such removals of pipelines were considered as removal under Rule 4 without payment of duty and hence, demands were raised. The appellant’s contention was that there was no removal while using these materials for flushing the pipelines, as these materials were received back in the factory to the crude tanks whenever single line is used for multi product transaction. This operation is very much necessary as otherwise the mixed products, if they are pumped to the ship directly, through the pipelines, are likely to contaminate the main consignment which will become liable for rejection. However, their plea was rejected and the demands in terms of the impugned order were confirmed.
3. The learned Counsel submits that this very issue came up for consideration in initially in the case of CCE v. Cochin Refineries Ltd. 2002 (117) ELT 112 (T), wherein the Tribunal after detailed consideration upheld the assessee’s plea and the Revenue’s appeal was rejected. He also relied on the ruling of Delhi Bench rendered in the case of Chennai Petrochem Corporation Ltd. v. CC, Chennai 2005 (192) ELT 973 (Tri.-Del.) wherein the cited judgment was applied and assessee’s appeal was allowed. He furnishes the copy of both these orders.
4. The learned JDR reiterated the Departmental views.
5. On a careful consideration, we notice that this issue has been decided in assessee’s favour in a detailed order rendered in the case of CCE v. Cochin Refineries Ltd. (supra). The said order has been applied again in the case of Chennai Petrochem Corpn. Ltd. (supra). The findings recorded in Para 4 in Chennai Petrochem Corporation Ltd. (supra) is reproduced herein below.
4. We find that the appellants had been granted the status of Refinery as early as 1969 and they have been functioning under the provisions of old Central Excise Rules, 1944 and were undertaking this activity of bringing back the mixture of SKO and HSD for refining and reprocessing for quite sometime. The said activity was within the provisions of Rule 143A of the Central Excise Rules, 1944. We observe that though the current Central Excise Rules do not have any specific provision in respect of bringing back the mixture of petroleum products for refining or reprocessing, etc., but still residuary rule i.e., Rule 33 provides for Transitional Provision which states that any notification, circular, instruction, standing order, trade notice or other order issued under Central Excise (No. 2) Rules, 2001 by the Board, the Chief Commissioner or the Commissioner of Central Excise, and in force as on the 28th day of February 2002, shall, to the extent it is relevant and consistent with these with the rules, be deemed to be valid and issued under corresponding provisions of these rules. The appellants’ cases specifically covered by Rule 143A and notification No. 218/84. Demand of duty on the HSD in question would also cause repeat payment of duty. So the provisions of Rule 143A and the notification No. 218/84 are relevant and consistent with the new rules, as the new rules also do not contemplate repeated liability to duty. Considering the above provisions of Central Excise Rule 33 and also the decision of this Hon’ble Tribunal in the case of CCE, Cochin v. Cochin Refinery (supra) we find that the Adjudication Order is not sustainable and is liable to be struck down. The appeal is, therefore, allowed with consequential relief, if any.
Respectfully following the ratio of the above noted judgments, the impugned orders are set aside and the appeals are allowed with consequential relief, if any.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)
