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TMI Blog2017 (1) TMI 1543X X X X Extracts X X X X X X X X Extracts X X X X ..... falling under the 2710 19 80 but is reclaimed fuel oil falling under 2710 99 00. The deeming fiction provides that when one of the process listed in the chapter note is carried out on lubricating oil or lubricating preparations, it shall be deemed to be manufacture. The instant case is the reclaimed fuel oil which is also waste oil falling under 2710 99 00 but used as fuel only and is not a lubricating oil or used as lubricating oil. The process of cleaning of waste oil to yield reclaimed fuel oil does not amount to manufacture as defined under Section 2(f) of the Central Excise Act, 1944 - Once it is held that the activity is not manufacture all other demands and imposition of penalty stands negated. Appeal allowed - decided in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest and penalty. After considering the reply of the assessee the demand of duty has been confirmed with penalty u/s 11AC and Rule 25 of the CER, 2002 as proposed in the notice. Further the lower authority had also imposed penalty of ₹ 16,66,243/- on Shri Sunil Ajith Jonas, who was the director of the company under Rule 26(1) of the CER, 2002. Another notice dated 3-2-2015 was issued on the same subject for the period January, 2014 to June, 2014 demanding ₹ 17,44,584/- which was adjudicated vide OIO dated 20/25-1-2016. Aggrieved by the said two OIO s the instant appeal has been filed by both the assessee and the director of the company on whom the penalty is imposed. Grounds of appeal 3. The appellant, in his appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of IFP Petro Products Pvt. Ltd. v. CCE ST, Ghaziabad [2017 (348) E.L.T. 172 (Tri.-All.)] which they state is in their favour and content that the process does not amount to manufacture. They also state that as per the Circular dated 11-4-2016 the reclaiming of fuel oil from waste oil cannot be termed as manufacture. Finding and discussions 5. I have carefully gone through the records of case and the submissions made by the appellant made during personal hearing. The appellant has paid ₹ 1,24,970/- on 28-4-2015, ₹ 67,912/- on 22-2-2016 against the demand confirmed in the two OIO s stated supra and hence the conditions of pre-deposit in respect of both orders under Section 35F of Central Excise Act, 1944 is fulfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, the appellants bring used waste oil and by removing impurities, it is made again usuable as fuel oil. Both before and after the processing, the product is only fuel oil. That being so, it cannot be said that a new and distinct commodity has come into existence consequent to the process undertaken by the appellants. Similar was the view of the Bombay High Court in the case of M/s. Oil Processors Pvt. Ltd. supra, wherein it was held that activity of converting the used-waste lubricating oil into usuable lubricating oil is not a refining process. 8. In case of CCE, Chennai-I v. Metropolitan Transport Company [2009 (16) S.T.R. 253 (Tri.-Chennai) = 2008 (224) E.L.T. 603 (Tri.-Chennai)] it was held that Manufacture - Conver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal Bangalore ruling in the case of Cee Jee Lubricants v. CCE, Cochin [2010 (251) E.L.T. 439 (Tri.-Bang.)] wherein it was clearly held that Manufacture - Refining the used/waste oil procured from market, in the form of vacuum distillation, centrifuging and removal of moisture, carbon and other impurities, does not amount to manufacture - Section 2(f) of Central Excise Act, 1944 - Chapter 27 of Central Excise Tariff. 10. In this connection I have also perused the Circular No. 1024/12/2016-CX, dated 11-4-2016 on the subject wherein the issue of clarification regarding re-refined used or waste oil has been discussed threadbare and certain instructions are given therein. Waste oil has two sub-classifications viz. 2710 91 00 and 2710 99 00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fora it can be held that the process of cleaning of waste oil to yield reclaimed fuel oil does not amount to manufacture as defined under Section 2(f) of the Central Excise Act, 1944. Once it is held that the activity is not manufacture all other demands and imposition of penalty in the impugned OIO stands negated. ORDER 12. The Appeal 42/15/MR/ST and 32/16/MR/SR filed by M/s. Jonas Petro Products (P) Limited, New Mangalore is allowed and the OIO No. MLR-EXCUS-000-DN01-JTC-KDK-082-2014-15, dated 5-3-2015 and MLR-EXCUS-000-DN01-ADC-KDK-068-15-16, dated 20/25-1-2016 passed by Joint Commissioner, Mangalore Commissionerate, Mangalore is quashed and set aside with consequential relief. 13. The Appeal 43/15/MR/ST filed by Shri Sunil A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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