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TMI Blog2018 (11) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... stances "Motor Spirit‟ is concerned - In the instant case testing in admixture with any other substance other than mineral oil, has not been carried out, therefore, there is no evidence to hold that the product answers to description ‘Motor Spirits’ amd therefore, would be classifiable under heading 2710.14 (prior to 01.03.05) and heading 2710 11 13 (after 01.03.2005). Revenue has failed to establish that the product in question is classifiable as ‘Motor Spirit’ under the description of single dash heading of motor spirits (prior to 01.03.2005) and triple dash (after 01.03.2005) - appeal allowed - decided in favor of appellant. - Appeal No. E/602,1430/2008, E/1094,1847/2009, E/849/2010-DB - A/12626-12630/2018 - Dated:- 26-11-2018 - Mr. Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) For the appellant: Shri V. Shridharan (Sr. Adv) Anand Nainawati, Adv. For the respondent: Ms. Nitina Nagori, Dy. Commr., (AR) ORDER Per: Raju These appeals have been filed by M/s Oil and Natural Gas Corporation (ONGC) against confirmation of demand of Central Excise duty and imposition of penalty. The appellants are engaged in manufacture of vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en charged that the product in question is a motor spirit. Ld. Counsel argued Motor spirit has been defined in Central Excise Tariff Act as under: Any hydrocarbon oil (excluding crude) which has its flash point below 25oC and which by itself or in admixture with any other substance is suitable for use as fuel in spark ignition engine. He pointed out that two conditions need to be satisfied for a product to be classified as motor spirit as held in the case of Indian Oil Company 1990 (45) ELT 134(T). In the said decision, following has been observed: 6. Yet another feature to be noted is that, as submitted by I.P.C.L., the department had tested the sample only for flash point. The tariff provides two criteria: one is the flash point; the other is that the mineral oil should, either by itself or in admixture with any other substance, be suitable for use as fuel for internal combustion engine. Satisfaction with both criteria is required. The departmental sample no doubt showed fulfillment of the flash point criterion. But, in a stoutly disputed case such as the present one, it was imperative on the part of the department to test the mineral oil also to determine whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that the main heading makes a specific exclusion of crude. If that be so, there is no merit in the contention that because of an exclusion clause provided under Motor Spirit, condensate has to undergo a test of flash point and use as a fuel in spark ignition engine for being excluded from the Heading 2710. Since the main heading itself excludes crude, it cannot be taken that a subsequent exclusion will bring it back under Heading 2710. There is also merit in the contention of the appellant that reference to admixture with any other substance is to be taken as substance other than mineral oil. The description under the heading Motor Spirit tallies with the description under Item 6 in the old Tariff. Therefore, by testing the product in question in admixture with motor spirit , it cannot be said that the product in question in admixture with any other substance is suitable for use as fuel in spark ignition engine. From the test report dated 06.04.2006 of chemical examiner it is clear that the product in question was tested in admixture mixed with motor spirit . When the substance mixed with the product in question itself is motor spirit , the admixture would cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re different. 4. We have gone through rival submissions. We find that practically identical case has been decided by Tribunal in the case of Bharat Petroleum Corporation Ltd 2018 (4) TMI 829. In the said decision also the issue in dispute was whether Naphtha can be classified as a motor spirit . The evidence was a test reports undertaken that the temperature for 5% recovery by volume and the temperature be 90% recovery fell in the range prescribed for SBPS. However, in the said case, no test was done for the suitability of the use of the product either by itself or with any other substance as fuel in spark ignition engine. In this case, the said test has been conducted. In the case of Bharat Petroleum Corp. Ltd. (supra), following has been observed: 3. We have gone through rival contentions. We find that the issue that if the product which the appellants claimed to be Naphtha classifiable under Heading 2710.14 is actually classifiable as Other Special Boiling Point Spirit or is it classifiable as Naptha under heading 2710.19 prior to 1.3.2005 and as Naptha under 2710 11 19 after 1.3.2005. Thus the issues which need determination are as follows: i) Is the produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41 31 35 85 43 5%v recovered @ C 56 34 41 88 59 10%v recovered@ C 59 35 42 89 61 20%v recovered @ C 63 36 42 91 66 30%v recovered@ C, 68 37 43 93 70 40%v recovered@ C 72 38 45 95 76 50%v recovered@ C, 77 39 46 97 82 60%v recovered @ C 82 40 48 100 88 70%v recovered @ C, 87 42 50 103 95 80%v recovered a@ C, 94 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 19 26 53 However to fall under the heading 2710.13 (prior to 1.3.2005) the product also needs to answer to the following description as well Motor spirit, that is to say, any hydrocarbon oil (excluding crude mineral oil) which has its flash point below 25 C, and which either by itself or in admixture with any other substance, is suitable for use as fuel in spark ignition engines: Similarly to fall under the heading 2710 1112 to 2710 1119 (after 1.3.2005) the product also needs to answer to the definition of motor spirit‟. Chapter heading 27.10 defines Motor Spirit as follows: Motor-spirit, that is to say, any hydrocarbon oil (excluding crude mineral oil) which has its flash point below 25 c, and which either by itself or in admixture with any other substance, is suitable for use as fuel in spark ignition engines . From the above analysis it is apparent that the test results prove that the products answers to the definition of Special Boiling Point Spirits in all respects except the description that appears in the single dash entry in the heading.. However, for cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th other substances Motor Spirit‟ is concerned. The tribunal in the case of Oil India Corporation Ltd. 2002 (148) ELT 802 deals with both tariffs that is, prior to introduction of HSN based tariff and also the period after that. It is seen that the in Tribunal in the said case observed as follows: 8. In view of the Board s clarification dated 17-11-81 the Revenue cannot take up a contention that condensate will not come under Item 68 of the old Tariff. The above clarification further makes it clear that condensate is petroleum in natural state and is crude oil. It is to be classified as crude mineral oil. If that be so, it would directly come under sub-heading 2709.00 which takes in petroleum oils and oils obtained from bituminous materials and crude. When we examine the Heading 2710 we find that the main heading makes a specific exclusion of crude. If that be so, there is no merit in the contention that because of an exclusion clause provided under Motor Spirit, condensate has to undergo a test of flash point and use as a fuel in spark ignition engine for being excluded from the Heading 2710. Since the main heading itself excludes crude, it cannot be taken that a su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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