TMI Blog2019 (1) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... mineral oil - In the instant case, letter of the Superintendent (prev.) dated 20.04.2006 suggests that the product has been tested in admixture with motor gasoline in the ratio of 10% V/V. The said letter of the Superintendent is in respect to subsequent query of the appellant seeking this information. In this background, it is seen that the product has not been tested for its suitability for use in admixture with any substance other than mineral oil as required - Thus Revenue has not produced the necessary evidence to classify the product as motor spirit falling under heading 2710.99 (prior to 31.03.2005) and under tariff Heading 2710 19 90 (after 31.03.2005). Demand set aside - appeal allowed - decided in favor of appellant. - A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue vide letter dated 24.04.2006 clarified those doubts. He pointed out that one of the doubts raised by the appellant was the percentage of mixed fuel oil used in the motor spirit for testing the sample as admixture. The Superintendent vide letter dated 24.04.2006 clarified that the percentage of mixed fuel oil in mixture with motor gasoline for determining ROM was 10% V/V. Thereafter SCN for the period July 2004 to August 2006 was issued to the appellant on 06.01.2007 seeking to classify mixed fuel oil as motor spirit classified under Tariff heading 2710.19 (upto 31.03.2005) and w.e.f. 01.04.2005 it was sought to be classified under Heading 2710 11 19. The appellant had claimed classification under heading 2710.99 (prior to 31.03.2005) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne. Ld. Counsel relied on the decision of Tribunal in case of Oil India Ltd. 2002 (148) ELT 802 wherein in para 8 of the Tribunal, it has been held that reference to admixture with any other substance is to be taken as substance other than mineral oil. He pointed out that the said decision in case of Oil India Ltd. has been affirmed by Hon ble Supreme Court reported in 2004 (170) ELT A116. 2.2 Ld. Counsel further argued that the demand SCN invoked extended period of limitation. He argued that there was no wilful misstatement of suppression of facts or contravention with intent to evade payment of duty on part of the appellant. He argued that in application dated 14.06.2004 seeking central excise registration they had disclosed the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas the product, when admixed with motor gasoline become suitable as a fuel for spark ignition engine. (emphasis supplied) Ld. AR also relied on the letter dated 17.10.2006 of Chemical Examiners, Vadodora wherein he has clarified that: He argued that the report of Chemical Examiner if not challenged cannot be brushed aside. 3.1 He further argued that in a case where Section 11AC has been invoked it is mandatory to impose penalty equal to the duty demanded. It is not open to the Adjudicating Officer to reduce the penalty imposed under Section 11AC. 4. Ld. AR relies on the impugned order. He also relies on the grounds of appeal in Revenue Appeal. 5. We have gone through rival submissions. We find that Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould, 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 fulfilment 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 it fulfilled the criterion of suitability for use as fuel in internal combustion engines. This, the department failed to do even though it was seeking to tax the oil as motor spirit. (emphasis supplied) Thus to qualify as motor spirit the product has to answer to the two test prescribed in the aforesaid decision. In case of Oil Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Superintendent (prev.) dated 20.04.2006 suggests that the product has been tested in admixture with motor gasoline in the ratio of 10% V/V. The said letter of the Superintendent is in respect to subsequent query of the appellant seeking this information. In this background, it is seen that the product has not been tested for its suitability for use in admixture with any substance other than mineral oil as required in terms of the decision of Tribunal in case of Oil India Ltd., upheld by Hon ble Apex Court (supra). Thus Revenue has not produced the necessary evidence to classify the product as motor spirit falling under heading 2710.99 (prior to 31.03.2005) and under tariff Heading 2710 19 90 (after 31.03.2005). In these circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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