2018 (3) TMI 984 - AT - Central Excise

Manufacture - whether blending of duty paid branded motor spirit with multifunction additives would amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944? - Held that - the issue already stands decided in favour of the assessee s in the case of Bharat Petroleum Corporation Ltd. vs. CCE 2009 (2) TMI 170 - CESTAT, NEW DELHI , wherein it was held that the activity will not amount to manufacture - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Early hearing application for appeal involving duty above ?1 crore.
2. Whether blending of duty paid branded motor spirit with multifunction additives amounts to manufacture under Section 2(f) of the Central Excise Act, 1944.

Issue 1: Early Hearing Application
The appellant filed a miscellaneous application for early hearing of the appeal due to the duty involved being above ?1 crore and the issue being decided in their favor. The application was allowed, and with the consent of both parties, the appeal itself was taken up for disposal.

Issue 2: Blending of Motor Spirit with Additives
The appeal was against an Order-in-Original regarding the blending of duty paid branded motor spirit with multifunction additives at a refinery. The question was whether this blending constituted "manufacture" under Section 2(f) of the Central Excise Act, 1944. The appellant relied on a previous decision in the case of Bharat Petroleum Corporation Ltd. vs. CCE, where it was held that such activity does not amount to manufacture.

In the cited case of Hindustan Petroleum Corporation Ltd. and others v. CCE, Delhi and Rohtak, the Tribunal had ruled that blending ordinary motor spirit with small quantities of multifunction additives to create branded motor spirit did not amount to manufacture. The blended product retained the same characteristics and specifications as the original motor spirit, enhancing its quality without fundamentally altering its nature. The Tribunal concluded that such processes aimed at enhancing marketability or value addition did not constitute manufacture and, therefore, were not subject to Central Excise Duty.

The present Tribunal, following the precedent set in the BPCL case, set aside the impugned order and allowed the appeal in favor of the appellant. The decision was pronounced and dictated in Open Court on 09/02/2018.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's reasoning in reaching its decision.