HINDUSTAN PETROLEUM CORPORATION LIMITED (A GOVERNMENT OF INDIA ENTERPRISE) A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956) Vs. UNION OF INDIA (UOI), MINISTRY OF LAW AND JUSTICE AND

JUDGEMENT

(1.) Rule. With the consent of the learned Counsel appearing on behalf of the respondents, rule is made returnable. The learned Counsel appearing on behalf of the respondents waives service. With the consent of the learned Counsel, taken up for hearing and final disposal.

(2.) The petitioner is in appeal before the Customs, Excise and Service Tax Appellate Tribunal, aggrieved by an order of adjudication passed by the Commissioner on 6th February 2008 confirming a demand of duty of Rs. 3.85 crores. An application for waiver of predeposit was filed before the Tribunal. By its order dated 11th September 2009, the Tribunal directed the petitioner to deposit an amount of Rs. 1 crore within a period of four weeks and to report compliance.

(3.) The issue which arises before the Tribunal in the appeal pertains to an Exemption Notification (No. 64/95CE) dated 16th March 1995. Under Serial No. 3 of the Notification, an exemption is provided in respect of all goods other than cigarettes 'if supplied as stores for consumption on board a vessel of the Indian Navy or Coast Guard. The petitioner claims to have supplied High Speed Diesel Oil as stores for consumption on board naval vessels. According to the petitioner, the product has been supplied through the installations of Indian Oil Corporation Limited, which are directly connected to the naval docks through dedicated pipe lines. The case of the petitioner is that prior to 6th September 2004 a facility of removing petroleum products without payment of duty from the refinery to the warehouse was available. The prevailing practice of Indian Oil Corporation Limited was to place orders upon the petitioner, confirming the quantities intended for supplies to Naval Vessels. The petitioner made supplies against specific indents placed by Indian Oil Corporation Limited and claimed the benefit of Exemption Notification No. 64/95CE. With effect from 6th September 2004, the warehousing facility was withdrawn. The petitioner continued the same practice, as before, of supplying or clearing specified quantities of HSD oil through pipe lines to IOCLs warehouse at Wadala, which in turn was cleared by IOCL to Naval Vessels.