TaxTMI 
TaxTMI 
2016 (10) TMI 820
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....Act, 1985 as 'Lubricating oils'. It was noticed that Appellant had availed the CENVAT Credit of the excise duty paid on LSHF-HSD for the period under dispute and utilized the same for discharging excise duty liability on clearances of specified final products. 3. The department issued Show Cause Notice dated 27.09.2006 alleging that appellant had taken irregular credit on LSHF-HSD during the period September 2001 to March 2006 and proposing demand of duty of Rs. 1,39,92,959/- with interest thereof and imposition of penalties. 4. The grounds for issue of notice can be summarized as under: High Speed Diesel (HSD) was specifically excluded from the definition of "input" under CENVAT Credit Rules, 2004 and that LSHF H....
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....hat manufacturing process of LSHF-HSD is distillation of crude oil received by the oil refineries, through a process of fractional distillation in which various components are separated according to boiling rages. As a result of the above process various Hydrocarbons viz. Gas, Naptha, Petrol, Kerosene are separated and bottom of the column will have heavy products such as LSHS etc., that the product LSHF-HSD is used as an additive in the process of manufacturing lubricants under their brand name Eco 2T oil; that LSHF-HSD works as a dilutive and reduces the viscocity of the polyisobutme, which is another additive present in the Eco 2T oil. Ld. Counsel further submitted that in case of classification disputes, the department cannot r....
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....of Rs. 12.5/ litre. The HSD Oil is sold even in petrol bunks but not the LSHF HSD. Hence it is clear that the LSHF HSD and HSD oil are not mutually substitutable commercially on sustainable basis. They have different names, characters and used. The sellers and users of these commodities are also different. Hence they are not the same commercial commodities. The issue involved is that of interpretation of law. Based on the aforesaid technical submissions and the judgement of the Honourable Sales Tax Appellate Tribunal, the Appellant were under the bonafide belief that CENVAT Credit was admissible on the Excise duty paid on LSHF-HSD. It is settled principle of law that the extended period of limitation cannot be invoked in cases of interpr....
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....ng of input. It is further seen that in the Central Excise Tariff Act, 1985 the classification of HSD is 2710 19 30. There is no separate sub-classification for LSHF-HSD. This implies that HSD and all its variations will necessarily be classified under the said heading only. The input invoices of LSHF-HSD from Indian Oil Corporation Ltd., also clearly classify the said items under CTH classification 2710 19 30 only. The use of the word High Speed Diesel in the definition of input will therefore necessarily have to harmonize with the tariff entry and heading of the same item in the said Central Excise Tariff Act. This being so, HSD and all its variations including LSHF-HSD, will be in the same footing, for the purposes of Rule 2(k) of CENVAT....