TaxTMI 
TaxTMI 
2025 (7) TMI 1407
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....Central Excise authorities. The prayer made by the Revenue is considered and accordingly, the Registry is directed to incorporate the following changed name and address of the respondent in the appeal records for the purpose of disposal of the appeal:- "Commissioner of Central Goods Service Tax & Central Excise, Navi Mumbai Commissionerate, 16th Floor, Satra Plaza, Sector -19D, Palm Beach Road, Vashi, Navi Mumbai - 400 705". 3.1 Brief facts of the case, leading to this appeal, are summarized herein below: 3.2. The appellants herein is engaged inter alia, in the manufacturer of petroleum products by refining of crude petroleum and marketing of various finished products viz., High-Speed Diesel (HSD), Motor Sprit (MS), Superior Kerosene Oil (SKO), Aviation Turbine Fuel (ATF), Lube Oil etc. by classifying the aforesaid products under Chapter 25, 27 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants are registered taxpayers holding Central Excise Registration No. AAACH1118BXM010 for manufacture of aforesaid excisable goods on payment of appropriate Central Excise duty and for compliance with Central Excise statue. 3.3 The excisable goods viz.,....
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.... equal amount of duty demanded, under Section 11AC ibid read with Rule 25 ibid vide order dated 31.03.2015. Feeling not satisfied with the impugned order, the appellants had preferred this appeal before the Tribunal. 4.1 Learned Advocate appearing for the appellants had submitted that the activity of mixing of SKO with MS or HSD is happening because of technical necessity, under such activity does not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944 and hence the demand of duty is not sustainable. Further, the appellants though cleared the SKO for the purpose of PDS availing the duty exemption benefit, for the quantum of inter mixed product SKO, they have been discharging the appropriate duty at the rate applicable for clearance of industrial SKO. Therefore, he submitted that demand of duty on such inter mixed SKO, as though such products are MS/HSD is not legally sustainable in view of the judgements of the Hon'ble Supreme Court in the following cases: (i) State of Hariyana Vs. Dalmia Dadri Cement Ltd. - 2004 (178) E.L.T. 13 (S.C.) (ii) BPL Display Devices Ltd. Vs. Commissioner of Central Excise, Ghaziabad - 2004 (174) E.L.T. 5 (S....
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....d whether the adjudged demands confirmed in the impugned order is legally sustainable. 8.1 In order to address the above issue, we would like to refer the relevant legal provisions contained in Central Excise Act, 1944 and Central Excise Rules, 2002 as it existed during the disputed period. "Central Excise Act, 1944 Chapter II Levy and Collection of Duty Duty specified in the First and Second Schedule to the Central Excise Tariff Act, 1985 to be levied. Section 3. (1) There shall be levied and collected in such manner as may be prescribed (a) a duty of excise to be called the Central Value Added Tax (CENVAT) on all excisable goods (excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Act, 1985 (5 of 1986): xxx xxx xxx xxx Provided that the duty of excise which shall be levied and collected on any excisable goods which are produced or manufactured by a hundred per cent export oriented undertaking and brought to any other place in India, shall be an amount equal to the aggregate of the ....
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....ermitted to be deposited without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; (cc) "time of removal", in respect of the excisable goods removed from the place of removal referred to in sub-clause (iii) of clause (c), shall be deemed to be the time at which such goods are cleared from the factory; (d) "transaction value" means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods." Central Excise Tariff Act, 1....
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....e with any other substance, is suitable for use as fuel in spark ignition engines. "Special boiling point spirits (tariff items 2710 12 11, 2710 12 12 and 2710 12 13)" means light oils, as defined in Sub-heading Note 4, not containing any anti-knock preparations, and with a difference of not more than 60°C between the temperatures at which 5% and 90% by volume (including losses) distil; (b) "natural gasoline liquid (NGL)" is a low-boiling liquid petroleum product extracted from Natural Gas; (c) "superior kerosine oil (SKO)" means any hydrocarbon oil conforming to the Indian Standards Specification of Bureau of Indian Standards IS : 1459 : 1974 (Reaffirmed in the year 1996); (d) "aviation turbine fuel (ATF)" means any hydrocarbon oil conforming to the Indian Standards Specification of Bureau of Indian Standards IS : 1571 :1992 : 2000; (e) "high speed diesel (HSD)" means any hydrocarbon oil conforming to the Indian Standards Specification of Bureau of Indian Standards IS : 1460 : 2005; xxx xxx xxx xxx Chapter Heading Description of goods (1) (2) 2710 Petroleum oils and oils obtained from bituminous minerals, other tha....
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....ely. Since all the three goods are supplied through a pipeline, the SKO get mixed with either MS or HSD. As per the provisions of Section 4 ibid, the excise duty is payable on the transaction value at the time of removal of the goods from the factory. In the present case, the goods cleared from the factory is MS/HSD and SKO. Accordingly, the duty on these products is payable as per price of the respective product prevailing at the time of removal of the goods. As regards MS and HSD, the duty was paid on the transaction value. As regards SKO, since the same was not sold but meant for Public Distribution System (PDS), the duty was paid on the prevailing price of SKO on the basis of sale price prevailing for SKO for industrial purpose, which is higher than the price of SKO sold under PDS. Therefore, the correct price was adopted by the appellant while clearing the intermix quantity of SKO. The sole reliance of the Adjudicating Authority is on the Board's Circular dated 22.02.2002. As there is no dispute in classification or the valuation of goods involved in the present case, such circular issued for the purpose of uniformity in assessment of excise duty cannot be applied in the prese....
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....to any goods in the Section or chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5of 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 render the product marketable to the consumer From the reading of the above clause, it is clear that the activity specified in the said clause (iii) will amount to manufacture only in respect of the goods specified under Third schedule. It is undisputed that the products of the appellant are not specified under third schedule, therefore, whatever activity mentioned in clause (iii) shall not apply to the goods which are not specified in Third schedule. For this reason, intermixing of SKO with HSD/MS does not amount to manufacture. 11. As per our above discussion, the differential duty demand raised on interface quantity of SKO is clearly not sustainable. Hence, the impugned orders are set aside and the appeals filed by the appe....