Mixing and blending for marketability was not manufacture, so excise duty demand failed

Mixing and blending MS and HSD with MFA to produce Xtra Premium and Xtra Mile did not amount to manufacture, because the process merely improved marketability and added value without bringing about manufacture in law. Following the binding decision in the assessee's own earlier case, affirmed by the Supreme Court, the Tribunal held that the excise demand was unsustainable and upheld the impugned order.

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Issues: (i) Whether mixing and blending MS and HSD with MFA to produce Xtra Premium and Xtra Mile amounted to manufacture and attracted excise duty.

Analysis: The Tribunal noted that the same issue had already been decided in the respondent's own case for an earlier period, where it was held that a process undertaken to enhance marketability or value addition does not amount to manufacture. That view had also been affirmed by the Supreme Court. The Tribunal followed the earlier binding decision and found no reason to take a different view on the Revenue's appeal.

Conclusion: The process of mixing and blending did not amount to manufacture, and the demand of excise duty was not sustainable.

Final Conclusion: The impugned order was upheld and the Revenue's challenge failed.

Ratio Decidendi: A process undertaken only to improve marketability or add value, without resulting in manufacture in law, does not attract excise duty.

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