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2021 (11) TMI 894 - AT - Central ExciseProcess amounting to manufacture or not - Ethanol Blended Petrol - whether the production of 10% Ethanol Blended Petrol (EBP) which involves the blending of 10% duty paid ethanol with 90% duty paid Motor Spirit (MS, commonly known as petrol) amounts to manufacture in terms of Section 2(f) of the CEA? - liability of excise duty prior to the issuance of Notification Nos.61,62,63, 64/2008-CE dated 24.12.2008 - HELD THAT - The dispute involved in this case pertains to the period from 16.12.2008 to 23.12.2008. We find that by placing reliance on the decision of BHARAT PETROLEUM CORPN. LTD. VERSUS COMMR. OF C. EX., LUCKNOW 2009 (2) TMI 170 - CESTAT, NEW DELHI , this Tribunal has set aside the Order-in-Appeal and allowed the appeal filed by M/s Bharat Petroleum Corporation Limited holding that the process of blending of small quantity of MFA with MS and HSD does not amount to manufacture and thus, would not attract payment of Central Excise duty. The issue arising out of the present dispute is no more open for any debate - Appeal allowed - decided in favor of appellant.
Issues:
- Whether the production of 10% Ethanol Blended Petrol amounts to manufacture in terms of the Central Excise Act. - Whether the duty liability for manufacturing 10% Ethanol Blended Petrol was discharged by the appellant. - Whether the appellant's appeal against the Central Excise duty demand, interest, and penalty imposed was justified. Analysis: 1. Manufacture of 10% Ethanol Blended Petrol: The issue in question was whether blending 10% duty paid ethanol with 90% duty paid Motor Spirit (petrol) constitutes "manufacture" under Section 2(f) of the Central Excise Act. The Tribunal referred to a previous case involving M/s Bharat Petroleum Corporation Limited where it was held that blending a small quantity of additives with petrol did not amount to manufacture. Citing this precedent, the Tribunal concluded that the process of blending did not attract Central Excise duty. 2. Duty Liability Discharge: The Department alleged that the appellant failed to discharge the duty liability for manufacturing 156KL of 10% Ethanol Blended Petrol during the disputed period. The adjudication order confirmed a Central Excise duty demand along with interest and penalty. However, the appellant argued that based on the precedent set by the Tribunal in the Bharat Petroleum case, the duty demand could not be sustained. The Tribunal agreed with the appellant's argument and set aside the adjudged demands, ruling in favor of the appellant. 3. Justification of Appeal: The appellant had appealed the adjudication order before the Commissioner (Appeals), who upheld the decision. Subsequently, the appellant filed an appeal before the Tribunal challenging the impugned order. The Tribunal, after considering the arguments from both sides and examining the case records, found that the issue had already been settled in previous cases and that the demands confirmed on the appellant could not be sustained. Therefore, the Tribunal allowed the appeal in favor of the appellant, setting aside the impugned order passed by the Commissioner (Appeals). In conclusion, the Tribunal's judgment revolved around the interpretation of whether blending ethanol with petrol amounts to manufacture under the Central Excise Act and whether the duty liability for such blending was discharged. The decision heavily relied on precedent cases and ultimately ruled in favor of the appellant, setting aside the Central Excise duty demand, interest, and penalty imposed.
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