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M/s. Indian Oil Corporation Limited Versus Commissioner of Central Excise & S.T., Vadodara

2015 (7) TMI 461 - CESTAT AHMEDABAD

Classification of LABFS and LARO manufactured by IOCL - Whether the same is classifiable under CETH 2710.29 as claimed by the appellants or the same should be classified elsewhere as not Kerosene - whether the benefit of Notification No. 75/84-CE will be admissible to the products LABFS and LARO manufactured by the appellant - Held that:- even if is not known as Kerosene will be classified under 271029. From the description of Kerosene given in tariff heading 2710, product like mineral colza and .....

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t 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/ u .....

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d 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, these products will also be classified under CETH 2710.29, as held by various judicial pronouncements, but for the purpose of benefit under exemption notification 75/84-CE only those categories of Kerosene will be eligible which are distributed though PDS. - .....

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l Excise and Customs, Vadodara for different periods. As the issue involved in both these appeals is the same, therefore, the same are taken up for disposal under this common order. 2. This matter was heard at length on 09.4.2015 during which both sides made their arguments. Learned AR also placed reliance on the judgment of Apex Court in the case of IOCL vs. CCE - [2010 (259) ELT 172 (SC)]. Shri Willingdon Christian, (Advocate) appearing on behalf of the appellant sought time to file written su .....

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l No. E/10639/2013) both LABFS and LARO have been held to be classifiable under CETH 2710.99. (iii) That Revenue is of the opinion that both these products are not eligible to exemption under Notification No. 75/84-CE as the said exemption is applicable to such Kerosene which is ordinarily used as illuminant in oil burning lamps. Learned Advocate made the bench go through the relevant tariff entries and the exemption notification. (iv) That as per tariff description under CETH 2710.29 Kerosene r .....

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apter 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 Indu .....

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ELT 172 (SC)], with respect to Notification No. 5/98-CE and 5/99-CE, cannot be held to be applicable to interpretation of a different exemption Notification No. 75/84-CE. (x) That on facts also the present case is different as no condition/end use has been specified in Notification No. 75/84-CE where a specific definition of Kerosene was given in Notification No. 5/98-Central Excise in the case before Apex Court in IOCL vs. CCE (supra). Learned Advocate made the bench go through Para- 17 of thi .....

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e classified as Kerosene under CETH 2710.29. Learned AR brought to the notice of the Bench case law of CCE Vs IOCL [2003 (157) ELT 41 (Tri.)]. It was his case that the judgment in this case was delivered immediately after the introduction of new tariff with effect from 28.02.1986, while in the present proceedings the period pertains to June 1991 to February 1994. That since dispute pertains to a different period, therefore Revenue can seek a different classification in view of the law laid down .....

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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 .....

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ara [2010 (259) ELT 172 (SC)]. It was strongly emphasized by the learned AR that even if the interpretation given by Hon'ble Supreme Court was with respect to Notification No. 05/98-CE dated 02.6.1998, still the ratio laid by the Apex Court will be applicable to the facts of the present proceedings. Learned AR made the Bench go through the judgment passed by the Hon'ble Supreme Court and argued that in Notification No. Notification No. 05/98-CE and No. 05/99-CE, there was no condition in .....

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5/98-CE. 4.3 Learned AR also argued that an exemption notification is to be read with words used in the notification and definition of Kerosene given in CETH can not be pressed into service while interpreting the exemption notification. It was also his case that while allowing exemption, there should be strict interpretation. In support of his arguments, learned AR relied upon the following case laws:- (a) CCE vs. IPCL 1990 (46) ELT 173 (Tri.) (b) Indian Airlines Limited vs. CC, Cochin 2002 (150 .....

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opal 2010 (260) ELT 3 (SC) (j) CCE, Kanpur vs. Flock India Pvt. Limited 2000 (120) ELT 285 (SC). 5. Heard both sides and perused the case records. The issue involved in these appeals is as to what could be the classification of LABFS and LARO manufactured by IOCL. Whether the same is classifiable under CETH 2710.29 as claimed 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 admissi .....

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710.29 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 tec .....

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) to Kerosene. Since such is not the case, it appears to us that any mineral oil (excluding mineral colza oil and turpentine substitute), other than A.T.F., which has a smoke point of 18 mm or more and has final boiling point not exceeding 3000C falls within sub-item (2) though it may not be Kerosene as ordinarily understood and ordinarily used as an illuminant in oil burning lamps. In view of the above observations made by the Larger Bench of the Tribunal in the case of CCE vs. IPCL (supra), th .....

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s interpreted by the judicial pronouncements that mineral oils meeting with the parameters specified, will be classified under 2710.29 even if they are not known as Kerosene in common parlance. In view of above it is held that products LABFS and LARO will be classifiable under 2710.29 as claimed by the appellant. 5.2 So far as admissibility of exemption under Notification No. 75/84-CE to the appellant is concerned, appellant is of the view that only word Kerosene is mentioned in the exemption no .....

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meters 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 .....

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be made to State of Jharkhand & Others vs. Tata Cummins Limited and another, 2006 (4) SCC 57 and Kartar Rolling Mills v. CCE, New Delhi - 2006 (4) SCC 772. If the intention of the legislature is clear and unambiguous, then it is not open to the courts to add words in the exemption notification to extend the benefit to other items which do not find mention in the notification. In the present case, there is no ambiguity in the expression used in the G.O. The intention of the State Government .....

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he opinion that, on? principle, the decision of this Court in Mangalore Chemicals - and in Union of India vs. Wood Papers referred to therein - represents the correct view of law. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision; they have to be construed strictly. A person invoking an exception or an exemption .....

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is Court in Hansraj Gordhandas vs. H.H. Dave [1978 (2) E.L.T. (J 350) (SC) = 1969 (2) S.C.R. 253) that such a Notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the e .....

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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 su .....

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se and rival submissions made by both sides, the Hon'ble Supreme Court made the following observations in Paras 13 to 17:- 13. It is manifest that the object of providing concessional rate of duty on kerosene used for illuminating burning oil lamps was to provide some relief to those economically backward sections of society who use Kerosene for illumination and other domestic purposes, and therefore, the benefit of concessional rate of duty was available only on the kerosene cleared by the .....

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chandra Hiralal Shah - (1996) 6 SCC 721). 15. Similarly, in State of A.P. vs. V. Sarma Rao & Ors. - (2007) 2 SCC 159, this Court held that :- The expression ordinarily may mean normally , as has been held by this Court in Kailash Chandra v. Union of India - (1962) 1 S.C.R. 374 and Krishan Gopal vs. Prakashchandra - (1974) 1 SCC 128 but, the said expression must be understood in the context in which it has been used. 16. Therefore, in light of the object and context of the notifications, it b .....

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o 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 manuf .....

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