CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH – COURT NO. I EXCISE APPEAL NO. 50292 OF 2025 (Arising out of Order-in-Original No. 03/Pr.Commr/C.Ex./BPL/2024-25 dated 27.11.2024 passed by the Principal Commissioner of CGST & Central Excise, Bhopal)

Bharat Petroleum Corporation ..…Appellant Limited Refinery, Administrative Building, Refinery Complex, Agasod, Sagar (M.P.) – 470124 VERSUS Principal Commissioner, .....Respondent CGST & Central Excise

35-C, GST Bhavan, Administrative Area, Arera Hills, Bhopal – 462011 APPEARANCE:

Shri Gopal Mundhra, Advocate for the Appellant Shri M.K. Jaiswal, Authorized Representative for the Department CORAM:

HON’BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)

Date of Hearing: 07.08.2025 Date of Decision: 06.02.2026 FINAL ORDER NO. 50226/2026 JUSTICE DILIP GUPTA:

This appeal has been filed by Bharat Petroleum Corporation Limited1 to assail the order dated 27.11.2024 passed by the Principal Commissioner, CGST & Central Excise, Bhopal² that confirms the proposal in the show cause notice for levy of central excise duty on Aviation Turbine Fuel³ that was cleared without payment of excise duty for the period from July, 2022 to March, 2023. The said duty has also been ordered to be

1. the appellant

2. the Principal Commissioner

3. ATF recovered from the appellant under section 11A of the Central Excise Act, 1944⁴. The order also directs for payment of interest under section 11AA of the Central Excise Act and penalty under section 11AC(1)(a) of the Central Excise Act.

2. The appellant is engaged in the manufacture and clearance of ATF classified under Chapter 27 of the Central Excise Tariff Act, 1985⁵. For operational reasons, the ATF intended for supply as fuel to foreign going aircraft cannot be dispatched directly from the refinery to such aircrafts. It is, therefore, cleared to various warehouse facilities across India, all of which are separately registered under rule 9 of the Central Excise Rules, 2002⁶ or the Central Excise Rules, 2017⁷. These warehouses store ATF and upon requisition from airlines, dispatch it to the foreign going aircraft through mobile tankers.

3. According to the appellant, the procedural framework adopted by the appellant is that the concerned warehouse obtains Form CT-2 certificate from the jurisdictional excise authority and forwards the same to the appellant. The refinery of the appellant then clears ATF to the warehouse without payment of excise duty following the procedure prescribed under Circular No. 804/1/2005-CX dated 04.01.2005. This Circular states that the facility of removal of petroleum products without payment of duty for export warehousing continues to be available through Notification No. 46/2001-CE (N.T.) dated 26.06.2001. Accordingly, ATF was cleared without the payment of excise duty on the strength of Form CT-2. Subsequently, for supply to foreign going aircraft, the warehouse clears the ATF without payment of duty under the cover of Form ARE-3, 4. the Central Excise Act

5. the Central Excise Tariff Act

6. the 2002 Rules 7. the 2017 Rules which is subsequently submitted to the excise offices having jurisdiction over the warehouse as well as the appellant in due course.

4. During the period from July, 2022 to March, 2023, an audit under section 65 of the Central Goods and Services Tax Act, 2017 was conducted at the refinery of the appellant. It was alleged that pursuant to an amendment to rule 19 of the 2017 Rules by Notification No. 02/2022 dated 30.06.2022, ATF was excluded from the facility of removal to warehouse without payment of duty and so excise duty became payable at the point of clearance from the refinery for eventual supply as aviation fuel to foreign going aircraft.

5. A show cause notice dated 31.07.2024 was, accordingly, issued to the appellant alleging that during the period from July, 2022 to March, 2023, the appellant had cleared ATF without payment of central excise duty amounti