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TMI Blog1989 (8) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... Petrochemicals Ltd. ( I.P.C.L. , for short) for manufacture of Linear Alkyl Benzene or Heavy alkylate ( LAB , for short). Such kerosene is duty-paid and is supplied in terms of Central Excise Notification No. 21/82 dated 27-2-1982. The notification exempts kerosene falling under Item No. 7 of the First Schedule to the Central Excises and Salt Act, 1944 (the Schedule is hereinafter referred to as the CET., for short), intended for use in the manufacture of L.A.B. in any premises declared under Rule 140(2) of the Central Excise Rules, 1944 (the Rules , for short) to be a refinery ( declared refinery , for short) from so much of the duty of excise leviable thereon as is equivalent to the duty leviable on that quantity of any mineral oil fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sample is colourless M.O. having flash point below 25 C. It has boiling point range from 67 C to 160 C.") The Central Excise authorities, therefore, appeared to have concluded that the return stream was made up of Motor Spirit, falling under Item No. 6, CET, and not any mineral oil falling under Items Nos. 7, 8 or 11A, CET as stipulated in the notification. The Superintendent of Central Excise, therefore, issued a notice to the I.O.C. on 8-10-1984, requiring it to show cause to the Assistant Collector, why the credit of Rs. 4,29,484.05 equivalent to 1,269.949 KIs at 15 C of LAB Feed Stock (Kerosene) which was granted to them on the RT 12 Return on 2-7-1984 should not be recovered and central excise duty of Rs. 28,62,312.62 at Rs. 2,253.88 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rs. 26,98,225.68) also submitted that the sample from the return stream had not been drawn in its presence, that they had not been given any representative samples, that as per I.P.C.L. s record, the return stream was kerosene only, that flash point was not the only criterion for classification of any product under Item No. 6, CET, that the main criterion was that the product either by itself or in admixture with any other substance should be suitable for use as fuel for internal combustion engines and that the departmental test result did not show satisfaction of this criterion. It was also submitted that I.P.C.L. s own analysis report on samples drawn from the return stream before its delivery to I.O.C. showed the distillation range fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or spirit was converted into Kerosene and therefore, there is a short levy is also not maintainable because IOC, Gujarat Refinery is a declared Refinery and the assessment of the product is based on the specification of the final product after blending, processing etc., in accordance with the provisions of Rule 143-A of Central Excise Rules, 1944, read with provisions of Rule 159 of Central Excise Rules, 1944. Accordingly, he discharged the show cause notice issued to I.O.C. and I.P.C.L. 2.4. The Collector of Central Excise, Baroda, in exercise of the powers conferred on her under Section 35E(2) of the Central Excises and Salt Act directed the Assistant Collector to make an application to the Collector of Central Excise (Appeals) for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other circumstances, concluded that the stream returned by I.P.C.L. to I.O.C. was not motor spirit. The Revenue has not, apart from relying on the departmental test result, adduced any evidence to rebut the contentions of the I.O.C. and I.P.C.L. It has not controverted the submission of I.O.C. that it was a technological impossibility to produce motor spirit out of kerosene. Also, the absurdity of any one wanting to downgrade motor spirit, a high-valued product, to kerosene, a relatively low-valued product (one of the allegations against I.O.C.) is so striking as to render the allegation implausible, in the absence of supporting evidence. I.O.C. s contention that this was a solitary and isolated instance of departmental test results not c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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