2009 (12) TMI 349 - AT - Central Excise

Tribunal Waives Deposit Requirement in Duty Appeal, Grants Stay Order

The Tribunal granted a stay on the impugned order, waiving the deposit requirement for the duty amount demanded. The appellants were directed to execute a ... Stay- Blending of Motor Spirit and HSD with small quantity of multifunctional activities to make branded MS/HSD. Tribunal in HPCL case, held such blending as not manufacture as merely anounted to having improved uality. Prima fcie case for grant of stay subject to condition of execution of bond in relation to duty amount, as directed by Bombay High court in similar matter. Interest and penalty waived till disposal of appeal. matter fixed for early hearing as demand relating to crore of rupees. Issues:1. Interpretation of whether blending motor spirit with multifunctional additives amounts to manufacture.2. Consideration of duty liability and waiver of amount demanded under the impugned order.3. Granting stay and fixing the matters for early hearing.Analysis:1. The appellants argued that blending motor spirit with multifunctional additives does not lead to manufacture, citing relevant case law and decisions. They emphasized that the resultant product being called power or speed does not automatically constitute a new product. They requested a stay on the impugned order and a waiver of the amount demanded until the appeal's disposal. On the other hand, the DRs contended that the process involved amounts to manufacture, resulting in a distinct new product with different uses. They supported their argument by referring to various decisions where similar processes were considered as manufacturing activities.2. The Tribunal referred to the HPCL case, which held that blending motor spirit with additives does not amount to manufacture but rather improves the quality of the product. Considering this and the Bombay High Court's interim decisions in similar matters, the Tribunal found a prima facie case for granting a stay. The appellants were required to execute a bond within three weeks for the duty demanded, while interest and penalty amounts were waived until the appeal's disposal. Due to the substantial duty demand and the significant legal issue raised, the Tribunal decided to fix the matters for early hearing.3. Ultimately, the Tribunal granted a stay on the impugned order and waived the deposit requirement for the duty amount demanded, subject to the execution of a bond by the appellants within three weeks. The appeals were scheduled for final disposal on a specified date, emphasizing the importance of the legal issues involved. The applications were disposed of accordingly, with instructions for compliance regarding the bond execution and listing the matters for further action on the specified date.