TaxTMI 
TaxTMI 
2019 (6) TMI 557
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....excise duty demand of Rs. 9,03,61,779/- against the appellant, along with interest thereon under Sections 11A(2) and 11AB of the Central Excise Act, 1944 ("the Act") respectively. Equivalent amount of penalty of Rs. 9,03,61,779/- has also been imposed under Section 11AC of the Act upon the appellant. 2. The facts of the case in brief are :- (a) The appellant refines crude oil and markets the finished products thereof, such as, motor spirit ("MS") and high speed diesel ("HSD"), kerosene, petroleum etc. MS and HSD are classifiable under Chapter Sub-heading Nos. 2710.1100 and 2710.1930 respectively. (b) The appellant also purchases, inter alia, MS and HSD from other public sector oil companies e.g., Indian Oil Corporation ....
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....ly, the appellant was liable to pay central excise duty thereon, amounting to Rs. 9,03,61,779/-, on the said products cleared during the period May 2008 to July, 2008, which was not paid and hence was recoverable from the appellant, along with interest under Sections 11A and 11AB of the Act respectively and that the appellant was liable to penal action under Section 11AC of the Act and Rule 25 of the Central Excise Rules, 2002. (f) Adjudication proceedings in terms of this show cause notice, in which the appellant filed its reply by a letter dated May 05, 2009, resulted in the impugned order dated June 30, 2009 of the Commissioner. 3. We have heard Shri S. Chakraborty, Sr. Advocate for the appellant and Shri S. S. Chattopadhyay,....
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....is blended with MFAs and sold as branded MS/branded HSD under brand-names like "Speed", "Power", "Turbojet" etc. The branded MS/HSD are claimed by the Appellants to increase the engine efficiency by reducing the formation of carbon deposits and accordingly are sold at a premium. The point of dispute in this group of appeals is as to whether the process of blending ordinary MS/HSD with very small quantity of MFAs (0.04% to 0.06%), to make branded MS /HSD amounts to manufacture. After considering the rival contentions on this point, we, for the reasons given below, hold that this process does not amount to 'manufacture' and hence would not attract any central excise duty. 4.1 The MS and HSD after being blended with small quantity of ....
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....d. Vs. CCE reported in 2004(164) E.L.T. 390(S.C.) has held that manufacture implies a process, as a result of which a new product with distinctive name, character and usages emerges, that the word 'manufacture' implies change, but every change in raw material is not manufacture and that there must be such a transformation in the raw material as a result of the processing that a new and different article with distinct name, characteristics and usages emerges. This criteria of manufacture is not satisfied in this case as, as mentioned above, the MS and the HSD after blending with MFA remain MS and HSD only and except for a brand name being added to their names, there is no change in their basic characteristics and usages. As mentioned above, ....
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.... usable. Blending of MS/HSD with MFA to make branded MS/HSD which sell at a premium only improves the quality of the product, and this process, as discussed above, would not amount to manufacture. 5. In view of the above, the impugned orders are not sustainable and the same are set aside. The appeals are allowed." 7. The same view has been taken by the Tribunal in the following cases also : (i) Hindustan Petroleum Corporation Limited Vs. Commissioner of C.Ex., Lucknow, 2015 (319) ELT 133 (T); (ii) Bharat Petroleum Corporation Limited Vs. Commissioner of C.Ex. & ST, Patna, 2013 (295) ELT 106 (T-Kol); (iii) Bharat Petroleum Corporation Limited Vs. Commissioner of C.Ex. 2018 (361) ELT 950 (T). 8. We fi....
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....e order dated September 2, 2008 of the Tribunal. The amended notification merely provides for two different rates of excise duty for MS and HSD, one for unbranded and the other for branded category. This does not and cannot mean that there is "manufacture" of excisable goods within the meaning of the Act by branding of MS and HSD or by addition of additives thereto. As such, merely because the aforesaid decision or the Tribunal was delivered in respect of clearance prior to March 1, 2008, the same cannot be said to be not applicable to the instant case. 10. As has been held in the aforestated decisions of the Tribunal, just because blending improves their quality and after blending they are sold under different brand names, the MS and HS....