TaxTMI 
TaxTMI 
2019 (6) TMI 1605
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....are more appeals on the self-same issue listed today. This appeal can be taken-up for hearing alongwith the other appeals. In view of the submissions made by the Ld. Representative, the Misc. application for early hearing of the appeal is allowed. With the consent of both sides, the appeal alongwith the other appeals of the appellant company are taken-up together for hearing. 2. Brief facts of the case are that the appellant is engaged in the manufacture of various petroleum products falling under Chapter 27 and 29 of the schedule to the Central Excise Tariff Act, 1985. During scrutiny of the records, department noticed that the appellant determined the interface quantity of Superior Kerosene Oil (SKO for short) which was supplied through ....
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....ubmits that the Board Circular is not supported by any statute therefore, the same is not binding on the assesse. He submits that the excise duty was paid on the actual quantity of SKO cleared from the factory. Therefore, subsequent intermixing of HSD/MS, the nature of the goods cleared from the factory does not change as it was at the time of removal of the goods. Therefore, duty on SKO was correctly paid on the quantity and as per nature of the goods. He further submits that the Adjudicating Authority has held that the intermixing of SKO with MS/HSD amounts to manufacture in terms of Section 2 (f) (iii) of Central Excise Act, 1944. In this regard, he submits that there is no charge in the show cause notice that there is any activity after....
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....sale price prevailing for SKO naturally which is higher than the price of SKO sold under Public Distribution System. Therefore, the correct price was adopted by the appellant while clearing the interface quantity of SKO. The sole reliance of the Adjudicating Authority is on the Board Circular dated 22.02.2002, which is reproduced below:- "Petroleum products movement through pipeline - Rate of duty on intermixed quantity - Clarifications Circular No. 636/27/2002-CX., Dated 22.04.2002 F. No. 261/27/5/2002-CX-8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject: - Movement of petroleum products through pipeline -Determination of duty on interface quantity. The problem....
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.... taken as MS or HSD is presently more than the duty liability on Furthermore, it is a fact that the SKO imported under concessional duty is not fully utilized for the intended purpose and in such case, the concessional duty cannot be extended. The Board is therefore, of the view that in the even of inter mixing of the products, the higher of the two duties i.e. duty payable on SKO not used for intended purpose and duty payable on surge/gain in MS or HSD shall be payable for the intermixed/ interface quantity. In other words, the duty of inter of the two values may be accepted. The existing instructions on the subject stand modified to the above extent." 7. On careful reading of the above Circular, we find that the Circular suggests that ev....
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....aw. The adjudicating authority has relied upon clause (iii) of Section 2 (f) for holding that activity amounts to manufacture, which reads as under:- "2(F)" Manufacture" includes any process:- i) Incidental or ancillary to the completion of a manufactured product; ii) Which is specified in relation to any goods in the Section or chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or iii) Which, in relation to the goods specified in Third Schedule involves packing or re-packing of such goods in a unit container or labeling or relabeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to rend....