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TMI Blog2018 (9) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... SKO get mixed with either MS or HSD. As per the provisions of Section 4, the excise duty is payable on the transaction value at the time of removal of the goods from the factory - In the present case, the goods cleared from the factory is MS/HSD and SKO. Accordingly, the duty on these products is payable as per price of the respective product prevailing at the time of removal of the goods - The appellant have correctly applied the price of respective goods cleared from the factory at the time of removal. Whether after removal of goods, intermixing of SKO with MS/HSD amounts to manufacture? - Scope of SCN - Held that:- There is no charge in the show cause notice that the activity of supplying HSD/MS with interface SKO amounts to manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on SKO and duty payable on MS/HSD. The contention of the department is solely based on CBEC Circular No. 636/27/2002-CX dated 22.04.2002 which is issued under F. No. 261/27/5/2002-CX-8, clarifying that in the event of intermixing of SKO with MS/HSD during movement of these petroleum products through pipeline, the higher of two duties i.e. duty payable on SKO not used for intended purpose and duty payable on surge/gain of MS or HSD shall be payable for intermixed/ interfaced quantity. Accordingly, the duty of intermixed part of SKO and MS/HSD as the case may be, should be quantified and higher of the two is payable. The Adjudicating Authority in the adjudication confirmed the demand of differential Central Excise duty with interest and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Commissioner (AR) appearing for the Revenue/respondent reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the record. We find that the fact is not in dispute that while clearing the goods, the appellant have cleared from the factory quantities of MS, HSD and SKO separately. Since all the three goods are supplied through a pipeline, the SKO get mixed with either MS or HSD. As per the provisions of Section 4, the excise duty is payable on the transaction value at the time of removal of the goods from the factory. In the present case, the goods cleared from the factory is MS/HSD and SKO. Accordingly, the duty on these products is payable as per price of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried out by product to product method of pumping and in such an event, co-mingling of one product with another is inevitable. The case of the oil company is that shortage of SKO imported under concessional rate of duty is accounted for in terms of the interface quantity i.e. the gain in Motor Spirit (MS)/High Speed Diesel (HSD) and the duty paid by them on this interface quantity is more than the duty foregone on SKO on account of concessional rate of duty. Therefore, as per the assessee, the question of additional duty liability does not arise. The Board has examined the issue from the twin objectives 2. of safeguarding revenue as well as avoiding unnecessary litigation. The existing instructions vide Board s letter F. No. 21/13/6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind any support of any statutory provisions in the Board Circular. The Hon'ble Supreme Court time and again held that the board Circular cannot vitiate the law or the Board Circular cannot be issued contrary to the statutory provisions. We refer some of the judgments on this issue:- (a) 2008 (229) ELT 641 (SC) Sindur Micro Circuits Limited vs. CCE Belgaum (b) 2009 (235) ELT 385 (SC) Atul Commodities Pvt. Limited vs. CC, Cochin (c) 2003 (156) ELT 819 (Bom) Narendra Udeshi vs. UOI (d) 2015 (326) ELT 26 (SC) DGFT vs. Kanak Exports 4. In view of the above judgments, it is clear that the Board can only clarify the existing law but cannot create law by itself. Therefore, the above Board Circular dated 22.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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