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2019 (6) TMI 871 - AT - Central ExciseBenefit of N/N. 4/2006-CE - clearance of SKO to various oil marketing companies for distribution under Public Distribution System (PDS) - exemption is sought to be denied on the ground that the said quantity SKO used as interface is not ultimately sold through Public Distribution System - CBEC Circular No. 636/27/2002-CX dated 22.04.2002 - HELD THAT:- The SKOPDS cleared by the appellant to HPCL. M/s. HPCL 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 - At the time of clearance itself, the appellant as well as HPCL was aware that the SKO used as interface cannot be segregated from MS or HSD. In other words, the SKO cleared as interface will obviously gets mixed with MS or HSD. From the above, it is also apparent that there is no intention of selling this SKO cleared as interface as SKO. The said SKO is mixed with MS and HSD and results in excess clearance/ receipt of MS and HSD. Mixing of small quantity of SKO in MS or HSD in the factory for any reason, and clearing the same as mixture of MS and HSD, the rate of duty applicable would be of MS and HSD. By using SKO as interface for pumping it into pipelines, the product leaving the factory is intermixed MS or HSD, answering to the description of MS or HSD. The same is received by HPCL as MS or HSD and the same is sold as MS or HSD. In these circumstances, the Revenue is right in demanding the duty on the product as intermixed MS or HSD as the same is cleared and sold as MS or HSD. Time Limitation - HELD THAT:- It is apparent that they were fully aware that SKO used as interface cannot be segregated and would remain as part of MS or HSD and it would assume the character of MS or HSD and would be sold as MS or HSD, they cannot claim benefit of limitation. In view of the above, the extended period of limitation has also been rightly invoked. Appeal dismissed - decided in favor of appellant.
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