2011 (4) TMI 1130

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.... point to 18 mm would amount to manufacture or not and if so, whether cenvat credit would be admissible of the additional duty paid on imported superior kerosene oil used in such blending. 3. The Revenue argues that mere blending of two verities of kerosene oil would not amount to 'manufacture' and they rely upon the Hon'ble Apex Court judgment in the case of Chowgule & Co. Pvt. Ltd. v. Union of India reported in 1993 (67) E.L.T. 34 (S.C.) in support of their contention. 4. The respondent M/s. Indian Oil Corpn. Ltd., Patna on the other hand would contend that indigenously produced kerosene oil which has a smoke point of 15 mm cannot be marketed as kerosene in terms of the BIS Standards laid down for the product vide Standard....

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.... 6. The decision of the Hon'ble Apex Court relied upon by the Revenue in the case of Chowgule & Co. Pvt. Ltd. (referred supra) deals with a sales tax case where it was held that "blending of different qualities of ore, possessing different chemical and physical composition so as to produce ore of contractual specifications does not amount to manufacture, ore that is produced not being a commercially new and distinct commodity but same article viz., ore, though with different specification under Section 8 (3b) read with Rule 13 of the Central Sales Tax Act, 1956. 7. We have given careful consideration of the above decision and we find that the facts in the instant case are different. In the instant case by blending the import....

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....l so as to make it a marketable product amounts to 'manufacture'. There are a large number of judgments of the Hon'ble Apex Court wherein it has been held that to determine whether an activity amounts to manufacture, it should be found out whether the activity brought into existence a new product with a distinct name, character and use. In the light of these decisions, the activity of blending superior kerosene oil with the indigenous kerosene oil in the instant case would amount to manufacture and we hold accordingly. 9. Once the process is held to be "manufacture", then the applicability of Cenvat Rules will automatically arise. In the instant case, the imported kerosene oil has been used as an input in the manufacture of kerosene....