|
Excise duty on Kerosene distributed through P.D.S.
Circular
No. 562 dated 8th December 2000
A
doubt has been raised on the applicability of exemption notification 5/98-CE
dt.2.6.98 to kerosene oil distributed through the Public Distribution System.
2.
Notification No.5/98-CE dt.2.6.98, at serial No. 27, prescribes a rate of
duty of 10% for kerosene. Kerosene has been defined as "kerosene, that is
to say, any hydrocarbon oil (excluding mineral colza oil land white spirit)
which has a smoking point of 18 mm or more (determined in the apparatus known as
smoke point lamp in the manner included in the Bureau of India Standards
Specification ISI: 1448(p-31) 1968 as in force for the time being)". The
exemption is conditional on the above-mentioned technical specification as well
as that the kerosene oil, "is ordinarily used as an illuminate in oil
burning lamps".
3.
The technical specification were found to be as per the requirement of
the notification by the field formations, but doubt was raised whether the
kerosene oil distributed through the PDS could be considered as satisfying the
condition "ordinarily used as an illuminate in oil burning lamps", as
there is no mechanism to ensure actual use of kerosene cleared for Public
Distribution System.
4.
The matter was discussed in the Tariff Conference held at Mumbai on 29th
and 30th August 2000. The Conference noted that the words
"ordinarily used� do not lend themselves to the interpretation that they
should be exclusively used for that particular purpose. The word �ordinarily
used� presupposes a variety of uses. When any goods are said to be used
ordinarily for a particular purpose, it automatically implies that the goods
have other uses, and the most common is the use, which is specified. Thus, if
the consumer also uses the kerosene oil, which is used for illumination of oil
lamps, for any other purpose, the exemption will continue to be applicable. The
various zones, it was noted by Conference, are already extending the exemption
to kerosene which is distributed through Public Distribution System and which is
capable of use as an illuminate and other purposes and it was felt that this
practice was in order.
5.
The Board has accepted the views expressed in the Conference and the
practice followed in extending exemption to kerosene supplied through P.D.S. so
long as kerosene supplied satisfies the prescribed technical specification. The
exemption notification 5/98-CE dt.2.6.98 will be applicable to kerosene oil
which is generally for use as an illuminate distributed through the Public
Distribution System even if the consumers also use the said kerosene oil after
clearance for any other purpose.
6.
The above clarification may be brought to the notice of the lower field
formations and trade interests may also be suitably advised.
7.
All pending disputes/ assessments on the issue may be settled in the
light of the above guidelines. Receipt of this circular may be please
acknowledged.
8.
Hindi version will follow
|