9911796707
TMI Blog2019 (6) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of Motor Spirit (MS), High Speed Diesel (HSD) and Superior Kerosene Oil (SKO). He pointed out that they were engaged in clearance of SKO to various oil marketing companies for distribution under Public Distribution System (PDS). He pointed out that Notification No. 4/2006-CE dated 01.03.2006 exempt "Kerosene for ultimate sale through Public Distribution System" from Central Excise duty. He pointed out that the appellant were clearing SKO to M/s. HPCL, who in turn was required to distribute the same under Public Distribution System through its network. M/s. HPCL has multi pipelines for transfer of MS, HSD and SKO to their depot located at Bahadurgarh from the Port city of Mundra. M/s. HPCL regularly purchasing SKO, HSD and MS from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. HPCL to the effect that entire quantity of SKO has been distributed through Public Distribution System. Thus, if there is any mis-declaration, it is on the part of M/s. HPCL and not on the part of appellant. Ld. Counsel further pointed out that Revenue has suppressed a letter dated 16.06.2015 of M/s. HPCL addressed to Dy. Director, DGCEI wherein following has been categorically stated :- "Detailed note on Pipeline operation process in this regard shall be provided separately for better understanding. It is explained clearly that MS and HSD cannot be pumped together, hence it is getting sequenced with SKO as interface in between HSD and MS, while transporting through pipeline. However, due to technical specifications, only sweet SKO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stored in SKO PDS received from various sources in a common tank. The allegation is that part of SKO-PDS received by HPCL is mixed with MS and HSD as the same is used as interface to pump MS/HSD through pipelines to various destinations. A part of SKO-PDS cleared by the appellant is not used for distribution through Public Distribution System but used as interface and consequently, the demand of duty. It is seen that M/s. HPCL in its letter dated 16.06.2015 has asserted as under:- "Detailed note on Pipeline operation process in this regard shall be provided separately for better understanding. It is explained clearly that MS and HSD cannot be pumped together, hence it is getting sequenced with SKO as interface in between HSD and MS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellant and received by HPCL, they would not have indulged in such intermixing as in those circumstances they could not have sold the same as MS or HSD. In view of the above, a safe conclusion can be reached by mixing up of the quantity of interfaced SKO, the essential character of the intermixed MS or intermixed HSD remains the same as of MS or HSD respectively. From the above, it is obvious that the appellant as well as HPCL were aware that the intermixed MS or intermixed HSD is sold as MS or HSD respectively, and as such it does not change the essential character of the MS or HSD cleared by the appellant and received by HPCL. Since it was cleared as intermixed with MS or HSD, SKO will not be distributed in the PDS, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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