The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) provided relief to Bharat Petroleum Corporation Limited (BPCL) by remanding the case regarding excess and short receipts of petroleum products, recognizing the coverage of the issue in a prior ruling and partially allowing the appeals for clarification and reconciliation as per the Ministry’s directives.
Bharat Petroleum Corporation Limited,the appellant-assessee, imported petroleum products that were cleared through a pipeline, with various products pumped one after another.The bills were settled by the Oil Marketing Companies (OMCs) based on the actual quantity received. Measurements taken at the refinery showed excess or short receipts at the OMCs.
The appellant issued debit and credit notes for these discrepancies and received consideration and duty only for the quantities acknowledged by the OMCs. The respondent, however, demanded additional duty for the excess receipts without adjusting for the short receipts.The appeals were filed aggrieved by the same.
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During the hearing of the appeals, the counsel for the appellant stated that the concerned ministries had reviewed the issue while the appeal was pending and determined that monthly adjustments for excess and short receipts at the OMCs could be settled.
As a result, the High Court of Kerala remanded the matter to the original authority in Customs Appeal No. 02/2011 through a judgment dated 16.07.2018, providing specific directions, which was held as:
“In such circumstances, we deem it fit that the questions raised herein be left open and the matter remanded back to the original authority for re-working the issue as per the permission granted in the clarification issued by the Ministry. Accordingly, the appeals are disposed of, leaving it open to the appellant to produce materials before the original authority to carry out the reconciliation of the net loss/net gain. Parties are left to suffer their respective costs”.
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The tribunal had also addressed the issue in the appellant’s own case, as reflected in Final Order No. 22975-22976/2017 dated 08.12.2017. The Authorized Representative (AR) for the revenue reiterated the findings in the impugned order and confirmed that the issue was indeed covered.
As the issue was addressed by the bench and the judgment of the High Court of Kerala, the appeals were partially allowed. The matter was remanded to the original authority for reworking in line with the clarification from the Ministry and for reconciling the net loss or gain as instructed by the High Court.
The two member bench comprising P.A.Augustian(Judicial Member) and Pullela Nageswara Rao(Technical Member) granted the appeals through remand.
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