1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2444/2010 Hindustan Petroleum Corporation Ltd. Petitioner Vs. The Union of India & Ors. Respondents Mr.M.H.Patil a/w Ms.Aparna Hirandagi for petitioner Ms.S.I.Shah a/w Ms.Suchitra Kamble for respondents CORAM- J.P.DEVADHAR ,AND MRS.MRIDULA BHATKAR,JJ. DATE -17TH FEBRUARY,2011 P.C. . Rule , returnable forthwith. By consent of parties the petition is heard finally . 2 This petition is filed to challenge the order of the Commissioner of Central Excise (Appeals) -II Mumbai dated 24/9/2010 and order dated 15/11/2010 declining to modify the order dated 24/9/2010. 3 By the impugned order dated 24/9/2010 the Commissioner of Central Excise (Appeals) has directed the petitioner to pay 25% of the duty and 25% of the penalty confirmed by order in original dated 31/12/2008 within four 2 weeks from the receipt of the said order. 4 The dispute in the present case relates to the levy of excise duty on the petroleum products lost in transit while transferring the said petroleum products from the refinery to the ware house /sales installation through pipe line. The duty demand has been confirmed by order in original dated 31/12/2008 mainly on the ground that under circular no.663 dated 23/9/2002 the loss can be condoned only if the loss incurred in respect of each type of the petroleum product is within the prescribed limit and not by setting off the loss in one product from the gains recovered in the other product. 5 Against the order in original dated 31/12/2008 the petitioner had filed an appeal and the Commissioner of Central Excise (Appeals) initially by his order dated 4/9/2009 directed the petitioner to deposit the entire duty demanded by order in original dated 31/12/2008 . On a writ petition filed by the petitioner, this Court by its order dated 23/6/2010 set aside the order of the Commissioner of Central Excise (Appeals) dated 4/9/2009 and directed the Commissioner of Central Excise (Appeals) to decide the waiver application afresh. Thereupon, by the impugned order dated 24/9/2010 the Commissioner of Central Excise (Appeals) 3 has directed the petitioner to deposit 25% of the duty and 25% of the penalty demanded/imposed within four weeks from the receipt of the order. Challenging the said order, the present petition is filed. 6 Whether the transit loss incurred by the assessee is within the limit prescribed by the circular no.663 dated 23/9/2002 is the question to be decided at the hearing of the appeal. There is no dispute that if the transit gain in one product is set off against the transit loss in another product then the combined loss would be within the limits prescribed in Circular No.636 dated 22/4/2002. The Government of India in the Assessee’s own case reported in 1991 (54)E.L.T.315 (G.O.I.) has held that the adjustment of transit gains against transit losses are permissible. Nothing is brought to our notice that the aforesaid decision stands nullified by the subsequent action of the Central Government. 7 In this view of the matter we are of the opinion that this is a fit case to grant full waiver . Accordingly orders of the Commissioner of Central Excise (Appeals) dated 24/9/2010 and dated 15/11/2010 are quashed and set aside. The Commissioner of Central Excise (Appeals) is directed to hear the appeals filed 4 by the petitioner without insisting on pre-deposit. 8 Rule is made absolute in the above terms with no order as to costs. (MRS.MRIDULA BHATKAR,J.) (J.P.DEVADHAR,J.)