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TMI Blog2015 (12) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... at regular interval and there will be intermix of two products. In the present case it is SKO & MS. We also find from the order of the adjudicating authority in respect of two of the intermingled/ interfaced quantity, the appellants have already upgraded it. Whereas, in the case of 886.65 kiloliters of interfaced quantity, wherein 50% of MS and 50% of SKO are intermixed, either downgraded or upgraded by the appellants based on the test report of the samples drawn from the intermingled products. It is tested in their own laboratory. On receipt of the test reports, the intermixed product is transferred to the respective main tank containing HSD or MS oil. We also find that the interface quantity is received separately and stored in slop tank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of assessee. - E/486/2011 - FINAL ORDER No. 41676 / 2015 - Dated:- 24-11-2015 - Shri R. PERIASAMI, Technical Member And Shri P.K. CHOUDHARY, Judicial Member For the Petitioner : Shri S. Muthuvenkataraman, Adv., For the Respondent : Shri K.P. Muralidharan, AC (AR) ORDER Per: R. Periasami The present appeal is filed against the order dated 16.08.2011 passed by the Commissioner of Customs, Central Excise and Service Tax, Coimbatore. 2. The brief facts of the case are that the appellant is a PSU having warehouse for storage of petroleum products like Motor Sprit (MS), High Speed Diesel Oil (HSD) adn Superior Kerosene Oil (SKO) falling under Chapter 27 of the CETA, 1985. They have received non-duty paid petroleu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse. He further submits that the adjudicating authority by relying the Board s circular concluded that the product of interface quantity upgraded to MS. Further, he drew attention to OIO dated 25.01.2004 passed by the Addl. Commissioner of Central Excise, Tiruchirapalli in their own case on identical issue, dropped the proceedings and the said order was not appealed. He drew attention to para 14 to 17 of the said order. He further submits that during adjudication proceedings, the Commissioner has not considered the Addl. Commissioner s order. Further, he submits that duty is payable on the excisable goods only on removal. Therefore, at the time of removal, whatever applicable rate of duty on the value has to be paid only on removal. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e practice followed during the relevant period. They received non-duty paid goods through pipelines and stored it in the storage tanks at the warehouse. It is seen from the records that when the petroleum products sent through the pipelines from Kochin, Coimbatore, Karur pipelines, in specific sequence of SKO, MS, SKO, HSD, SKO, MS and the product is changed in the pipeline at regular interval and there will be intermix of two products. In the present case it is SKO MS. We also find from the order of the adjudicating authority in respect of two of the intermingled/ interfaced quantity, the appellants have already upgraded it. Whereas, in the case of 886.65 kiloliters of interfaced quantity, wherein 50% of MS and 50% of SKO are intermixed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities have discussed the Board s Circular. It is pertinent to state that there is no dispute on the fact that the interface/intermingle quantity has to be cleared as HSD or MS or SKO. Therefore, higher products MS SKO once it is intermixed it loses its originality and therefore it cannot be cleared to a consumer as MS or SKO, if it doesn t meet specification. Therefore, as per the BIS standards and as per the test report, the product if it is higher quality, it is upgraded and if it is lower quality, it is downgraded. It is the general practice followed for all the petroleum products cleared through pipeline where the intermingled/interface quantity emerges and stored separately and subsequently upgraded or downgraded. Therefore, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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