Kerosene duty classification under Notification No. 8/96-C.E. upheld at 10% ad valorem; differential demand failed.

Superior kerosene oil cleared during the relevant period was treated as chargeable at 10% ad valorem under Notification No. 8/96-C.E., because kerosene falling under Chapter 27 was covered by Serial No. 27.17 and the Tax Research Unit had clarified that rate. The Tribunal also noted that similar demands against another unit had already been dropped on the same ground. On that basis, the assessee's rate classification was accepted, and the differential duty demand with consequential penalty was held not sustainable.

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Issues: Whether superior kerosene oil cleared during the disputed period was chargeable to duty at 10% ad valorem under Notification No. 8/96-C.E. dated 23-07-1996, and whether the differential duty demand and penalty were sustainable.

Analysis: The clearance records showed that the assessee paid duty at 10% ad valorem, while the department proceeded on the basis that the revised rate was 15% ad valorem after the budgetary change. The Tribunal noted that the Tax Research Unit had clarified that kerosene falling under Chapter 27 was chargeable at 10% ad valorem under Serial No. 27.17 of Notification No. 8/96-C.E. dated 23-07-1996, and that the Commissioner had already dropped similar demands against another unit on the same ground. On that basis, the Tribunal accepted the assessee's contention regarding the applicable rate.

Conclusion: The disputed product attracted duty at 10% ad valorem during the relevant period, and the differential duty demand with consequential penalty was not sustainable.

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