Tribunal: Blending fuel with additives not manufacturing; Consistency in rulings

The Tribunal held that the conversion process of blending motor spirit and HSD with multifunctional additives does not amount to manufacture. Relying on past decisions and a Supreme Court ruling, the Tribunal found no change in the characteristics or use of the resultant product, thus distinguishing it from cases where blending was considered manufacture. The Tribunal emphasized consistency in rulings, ultimately setting aside the impugned order and granting relief to the appellants due to the absence of contradictory decisions and adherence to established precedents.

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Issues involved: Determination of whether the conversion of motor spirit into motor spirit power and HSD into HSD turbojet by mixing multifunctional additives amounts to manufacture.

Analysis:

1. Issue of Manufacture: The main issue in this case is whether the process of converting motor spirit and HSD by blending small quantities of multifunctional additives constitutes "manufacture." The Tribunal referred to previous decisions involving similar issues between the same parties. It was held that blending of duty paid unleaded motor spirit and HSD with multifunctional additives does not amount to manufacture as there is no change in the characteristics or use of the resultant product, citing precedents like Hindustan Petroleum Corp. Ltd. v. CCE, Delhi and Bharat Petroleum Corp. Ltd. v. CCE, Lucknow.

2. Comparison with Previous Decisions: The Tribunal also discussed a contrary decision in the case of CCE, Patna v. Indian Oil Corp. Ltd., where blending of imported superior Kerosene oil with domestically produced kerosene oil was considered as manufacture. However, the Tribunal distinguished this case from the present appeals, noting the different processes involved and the distinct characteristics of the final products. The Tribunal emphasized that the issue in the cited case was not similar to the current matter.

3. Relevance of Supreme Court Decision: The appellants relied on a Supreme Court decision in CCE, Bangalore v. Osnar Chemical Pvt. Ltd., which concluded that mixing polymers and additives to base bitumen does not result in the manufacture of a new marketable commodity. The Tribunal found that this Supreme Court decision was in line with the earlier Tribunal decisions on the issue at hand. As the Revenue failed to present any contradictory decision, the Tribunal followed the precedent and set aside the impugned order, thereby allowing all the appeals and granting relief to the appellants.

In conclusion, the Tribunal held that the conversion process involving blending motor spirit and HSD with multifunctional additives does not amount to manufacture based on established precedents and the absence of contrary decisions. The Tribunal's decision was influenced by the consistency of rulings on similar issues between the same parties and the lack of evidence to support a different interpretation.

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