TMI Blog2015 (7) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... taxing provision is normally construed in favour of the assessee but when it is case of granting some exemption then there should be strict interpretation and in case of any doubt or ambiguity the benefit must go to the State. The word Kerosene used in the exemption Notification 75/84-CE therefore, cannot be understood by taking recourse to parameters given to Kerosene , under CETH 2710. The word Kerosene has to be understood with respect to interpretation/ understanding attributed by those who deal in Kerosene . This is the ratio laid by the Hon'ble Supreme Court in the case of IOCL vs. CCE, Vadodara [2010 (10) TMI 7 - SUPREME COURT OF INDIA], and is relevant Product LABFS and LARO are not cleared as Kerosene at all and only used for the purpose other than for illuminant oil for burning lamps or other domestic use. The ratio of the law laid down by the Hon'ble Supreme Court in the case of IOCL vs. CCE, Vadodara (supra), word Kerosene used in exemption notification No. 75/84-CE will have to be understood only with that category of Kerosene which is distributed through PDS as Kerosene . For the purpose of classification of mineral oils other than Kerosene cleared through PDS, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al oil (b) It should have smoke point of 18mm or more (c) It should have FBP not exceeding 3000C; and (d) It should not be mineral Colza Oil and turpentine substitute (v) That both LABFS and LARO manufactured by the appellant have these characteristics and will be classified under CETH 2710.29 and will be eligible to Notification No. 75/84-CE which exempts all categories of Kerosene and no specific Chapter heading or sub-heading is mentioned in the exemption notification and no intended use/condition is specified in Column -4 of Serial No 52 of the exemption Notification No. 75/84-CE. (vi) That as per case Law CCE Vs IOCL [2003 (157) ELT 41 (Tri.)] in their own case, Larger Bench has held that all kinds of mineral oils, except those specifically excluded from 2710.29, are to be classified under 2710.29. That similar view was taken by 5 member Larger Bench in the case of CCE vs. Reliance Industries Limited [2000 (19) ELT 29 (Tri. LB)]. (VII) That definition of Kerosene given in CETH 2710.29 will be applicable to the word Kerosene used in Serial No. 52 of Notification No. 75/84-CE. (viii) That as per the ratio laid down by Apex Court in the case of GSFC vs. CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at is to say, any mineral oil (excluding mineral colza oil and turpentine substitute) which has smoke point of eighteen millimetres or more and has a final boiling point not exceeding 3000C 2710.21 -- Aviation Turbine FuelRs. 1000 per KL at 150C. 2710.29 -- Other ₹ 500 per KL at 150C. 2710.99 -- Other 20% plus ₹ 250 per tonne. 4.1 Learned AR emphasized that for the earlier show cause notice, Revenue is seeking classification under 261029 of the CETH and for the later period show cause notice, the classification is claimed under CETH 271099. It was strongly argued by the learned AR that both LABFS and LARO are not cleared by the appellant as Kerosene and the same are also not ordinarily used for illuminate in oil burning lamps. 4.2 So far as admissibility of exemption under Notification 75/84-CE is concerned, learned AR argued that only those Hydrocarbon/ mineral oils which are cleared as Kerosene under PDS will be eligible for exemption under Notification No. 75/84-CE as held by Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed by the appellants or the same should be classified elsewhere as not Kerosene . The second issue involved is whether the benefit of Notification No. 75/84-CE will be admissible to the products LABFS and LARO manufactured by the appellant. 5.1 So far as the issue of classification of the products manufactured appellant has placed reliance on the judgment of CCE, Bombay vs. Reliance Industries Limited [2000 (119) ELT 26 (Tri. LB)] and CCE vs. IOCL [2003 (157) ELT 41 (Tri.)]. It is the case of the appellant that it has been held by the five Members Bench in the case of CCE, Bombay vs. Reliance Industries Limited Heavy Normal Paraffin (HNP) is classifiable under CETH 2710.29 and not under CETH 2710.99 when parameters specified in CETH 271029 are fulfilled. It is observed that so far as classification of the products manufactured by the appellant is concerned the issue is no more res-integra in view of the case law of CCE vs. IPCL [1990 (46) ELT 173 (Tri.)]:- 27. Applying the above principle to the facts of the present case, we see that the term Kerosene, though a commonly understood term, has been defined by the Legislature and the definition contains the technical terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assification of different Hydrocarbons under CETH 2710. It is the case of the Revenue that parameters given in CETH 2710 for Kerosene can not be put into service for interpreting the word Kerosene used in the exemption notification. Revenue has relied upon the judgment of Hon'ble Supreme Court in the case of IOCL vs. CCE, Vadodara (supra). Appellant has strongly argued that Apex Court s judgment is with respect to Notification No. 5/98-CE dated 02.6.1998 and the same can not be used for interpreting a different notification i.e. Notification No. 75/84-CE. We are not inclined to accept the arguments made by the appellant because the word Kerosene has been interpreted by the Apex Court in this judgment and certain observations have been made. Learned AR also relied upon the judgment in the case of Orient Traders vs. Commercial Tax Officer, Tirupati [2009 (237) ELT 447 (SC)]. Para 18 of this case law is relevant where the Apex Court has made following observations:- 18. It is well established principle that the exemption notifications are to be construed strictly, reference may be made to State of Jharkhand Others vs. Tata Cummins Limited and another, 2006 (4) SCC 57 and Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption. 5.4 It is clearly laid down in the above case law by the Apex Court that normally it is practice that in case of any doubt or ambiguity, taxing provision is normally construed in favour of the assessee but when it is case of granting some exemption then there should be strict interpretation and in case of any doubt or ambiguity the benefit must go to the State. The word Kerosene used in the exemption Notification 75/84-CE therefore, cannot be understood by taking recourse to parameters given to Kerosene , under CETH 2710. The word Kerosene has to be understood with respect to interpretation/ understanding attributed by those who deal in Kerosene . This is the ratio laid by the Hon'ble Supreme Court in the case of IOCL vs. CCE, Vadodara [2010 (259) ELT 172 (SC)], and is relevant. In this case, Apex Court has interpreted the Serial No. 27 of exemption notification 5/98-CE dated 02.6.1998, where description of goods was given as follows:- Sr. No. Chapter or heading No. or sub-heading No. Description of goods Rate Conditions (1) (2) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rate of duty extends only to that variety of kerosene that : (i) has a smoke point of 18mm or more, and (ii) is ordinarily used as an illuminant in oil burning lamps. It is manifest that these two conditions are conjunctive, and therefore, the twin conditions need to be satisfied in order to avail of the concessional rate of duty. In the instant case, the fact that the assessee cleared kerosene manufactured by it to industrial consumers would entail that the assessee cannot claim the benefit of Notifications No. 5/98-C.E. and 5/99-C.E. 6 It is relevant to mention that in the case before the Hon'ble Supreme Court also the product involved was Kerosene and only1% of the Kerosene manufactured by the appellant IOCL was cleared to industrial users, though the product cleared to these users was also Kerosene . However, it was held by the Apex Court that for the purpose of exemption under Notification 5/98-CE, the same product will not be considered as Kerosene as the same is not cleared by IOCL through the PDS. In the present case before us, it is not disputed that the product LABFS and LARO are not cleared as Kerosene at all and only used for the purpose other than for illumi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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