Tribunal rules blending furnace oil with MTO is manufacturing under excise law.

The Tribunal upheld the decision rejecting the appellant's claim for exemption and dismissed the appeals, determining that the blending of furnace oil and MTO to create industrial fuel oil amounted to manufacturing under the central excise law.

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Issues Involved:
1. Applicability of Notification No.50/03-CE for exemption on industrial fuel oil.
2. Determination of whether the blending of furnace oil and MTO constitutes manufacturing activity.
3. Consideration of case laws and circulars in determining the manufacturing activity.
4. Assessment of the plea of 'no manufacture' and its timing.
5. Evaluation of the classification of furnace oil and industrial fuel oil under the Central Excise Tariff Act.

Analysis:

Issue 1: Applicability of Notification No.50/03-CE for exemption on industrial fuel oil
The appellant filed a declaration under Notification No.50/03-CE for availing exemption for industrial fuel oil. However, authorities rejected the exemption as the item did not qualify under the said notification. The Tribunal upheld this decision, stating that the appellant's product did not fall under the exemption criteria, as per the Central Excise Tariff Act.

Issue 2: Determination of whether the blending of furnace oil and MTO constitutes manufacturing activity
The appellant argued that blending furnace oil and MTO did not amount to manufacturing under central excise law. They claimed that no new product emerged from the blending process and cited examples to support this contention. However, the Tribunal found that the blending process resulted in a new product, industrial fuel oil, which was distinct from its components. As the final product was different and marketable separately, the activity was considered as manufacturing.

Issue 3: Consideration of case laws and circulars in determining the manufacturing activity
The appellant relied on various case laws and circulars to support their argument that blending did not constitute manufacturing. However, the Tribunal distinguished the facts of the present case from those cited by the appellant, emphasizing the emergence of a new product through blending. The Tribunal concluded that the appellant's reliance on previous judgments was not applicable to the current scenario.

Issue 4: Assessment of the plea of 'no manufacture' and its timing
The appellant contended that even if they paid duty under a mistaken belief that the product was excisable, they could still argue 'no manufacture' at a later stage. The Tribunal referred to relevant judgments and held that the blending activity amounted to manufacturing, rejecting the appellant's argument regarding the timing of the plea.

Issue 5: Evaluation of the classification of furnace oil and industrial fuel oil under the Central Excise Tariff Act
The appellant argued that since both furnace oil and industrial fuel oil fell under the same heading in the Central Excise Tariff, there was no manufacturing involved. However, the Tribunal disagreed, stating that the emergence of a new product, industrial fuel oil, through blending constituted manufacturing, regardless of the classification under the tariff.

In conclusion, the Tribunal upheld the decision rejecting the appellant's claim for exemption and dismissed the appeals, determining that the blending of furnace oil and MTO to create industrial fuel oil amounted to manufacturing under the central excise law.

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