TMI Blog2020 (9) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the learned Commissioner in rejecting the test reports. The appellant while clearing the EBP from their Vashi Terminal invariably conducted tests on the EBP samples to ascertain its quality and the specification of the product before clearance. Needless to mention the said product is subjected to strict control and orders issued by Central and State Government from time to time viz. Motor Spirit and High Speed Diesel(Regulation of Supply Distribution and Prevention of Malpractices) Order,1998, where under the quality and specification of the MS to be strictly complied. It is found that at the Vashi Terminal where the duty paid MS and Ethanol were received, and after blending the same, EBP emerges, the Appellant carry out tests, albeit nine out of fifteen tests, which indicated that it conforms the BIS 2796:2000 specification and the control Order, 1998; and accordingly cleared/sold to their customers like other Refineries /terminals did. Later on being disputed by the department about the correctness of the test reports of EBP at Vashi Terminal as all the tests were not carried out on the samples, they subjected the samples tested at their Refinery and produced test certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 5% ethanol. The EBP was cleared at concessional rate of duty as per Notification No. 28/2002 dated 13.5.2002 amended by Notification No. 16/2003 dated 1.3.2003 read with Notification No. 14/2003 and Notification No. 15/2003, further amended by Notification No. 12/2004 dated 4.2.2004. Alleging that the appellant had not complied with the condition of said notifications inasmuch as the EBP did not satisfy the Bureau of Indian Standard s (BIS) specification 2796:2000, two SCNs were issued to them for the period April,2003 to June, 2004 demanding total duty of ₹ 13,37,17,740/-. Also demand notice was issued for recovery of the said amount under Section 11D of Central Excise Act, 1944 alleging that though the duty was collected from the customers but not deposited with the Govt.. On adjudication, the demands have been confirmed with interest and penalty. Aggrieved by the said order, the appellant filed an appeal before this Tribunal. The Tribunal by its order dated 07.5.2013 remanded the matter to the adjudicating authority for de novo adjudication after taking into consideration the test reports submitted by the appellant to establish the product cleared by them conforms the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued with the demand notices alleging that they did not produce any certificate or letter issued by BIS to the effect that EBP manufactured and marketed by HPCL conforms to BIS- 2796:2000 specification. Further, it was alleged that they had not conducted all the tests in their Vashi Terminal; hence, the clearances of EBP do not qualify for exemption under Notification No. 28/2002-CE. 3.3 It is his contention that after the remand of the proceedings by the Tribunal, they have made various submissions in support of their contention that EBP supplied by their Vashi Terminal was conforming to BIS specification 2796:2000, including evidences like test reports dated 01.6.2004 and 05.6.2004 to show that they are eligible for exemption under the relevant notifications. Also, they have submitted that since invoices reflect the composite cum-duty price, element of central excise duty was not shown separately, therefore, provisions of Section 11D are not applicable to their case. However, the learned Commissioner without considering their submissions advanced on behalf of the Appellant confirmed the demand. 3.4 He has submitted that the learned Commissioner has ignored their submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued from Vashi Terminal indicated a composite price, which is the sale price of petrol and did not show element of duty separately. It is his contention that duty was paid considering 95% of Motor Spirit (by volume) contained in EBP, while invoices for clearance of EBP were prepared showing a composite price, without showing duty element separately. It is his contention that this is a principle of law settled by the Tribunal in a series of cases. In support, he has referred to the judgment in the following cases :- (i) Bharat Petroleum Corporation Ltd. Vs. CCE, Raipur 2002 (144) ELT 672 (Tri-Del) (ii) Bharat Petroleum Corporation Ltd. Vs. CCE, Nagpur 2003 (158) ELT 833 (Tri-Mum) (iii) Hindustan Petroleum Corporation Ltd. Vs. CCE, Aurangabad 2003 (162) ELT 391 (Tri-Mum) 4. Learned AR for the Revenue reiterates the findings of the learned Commissioner. He has submitted that since the appellant has cleared EBP without producing certificate from BIS indicating that it conforms the BIS Standard 2796:2000 as required under the Notification No. 28/2002-CE dated 13.5.2002; benefit of the said notification cannot be allowed. They were required to pay standard rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereon under the First Schedule (hereinafter referred to as the First Schedule) to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table; and (b) from so much of the Special duty of excise leviable thereon under the Second Schedule (hereinafter referred to as the Second Schedule) to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (5) of the said Table, subject to the relevant conditions specified in the Annexure to this notification, and referred to in the corresponding entry in column (6) of the said Table : Provided that nothing contained in this notification shall apply to goods falling under sub-heading No. 3605.10 against S. Nos. 65, 66, 67 and 68 of the said Table on or after the 1st day of April, 2002 : Provided further that nothing contained in this notification shall apply to the goods specified against S. Nos. 193, 195, 199 and 200 of the said Table on or after the 1st day of March, 2005. Explanation. - For the purposes of this notification, the rates specified in columns (4) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nil Notification No. 14/2003-C.E., dated 1-3-2003 reads as under: - Petrol - Motor spirit intended for use in ethanol blended petrol - Exemption In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby exempts Motor spirit (commonly known as petrol) (hereinafter referred to as said goods), falling under heading 27.10 of the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as said Schedules), manufactured in and cleared from an oil refinery or cleared from a registered warehouse, intended for use in ethanol blended petrol, that is, a blend, (a) consisting, by volume, of 95% Motor spirit, (commonly known as petrol) and of 5% ethanol; and (b) conforming to Bureau of Indian Standards specification 2796 from so much of the duty of excise leviable thereon under the said Schedules, as is in excess of the duty that would have been leviable on such goods under the said Schedules, if sold by the manufacturer for delivery at the time of removal of such goods or at any other time nearest to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the contention of the appellant on the ground that since the Vashi Terminal did not have the facility to conduct all the 15 tests required for BIS 2796:2000 specification, the department issued demand notice to the appellant. Subsequently, after drawing samples of EBP the appellant got the sample tested at their Refinery, which is equipped with the facility to test all the parameters, and produced two test reports indicating that the samples conforms the BIS 2796:2000 specification. 11. In the first round of litigation, this Tribunal remanded the matter to the adjudicating authority to analyze and consider the said two test reports to examine whether the appellants are eligible to the benefit of exemption notification. In the de novo proceeding, the learned Commissioner though considered the certificates but did not accept the same on the ground that since it was conducted in 2004 and the demand was for the period April, 2003 to June, 2004, it is an attempt on the part of the appellant to show that it conforms BIS 2786:2000 specification which is an afterthought and lacks evidentiary value. 12. We do not find merit in the reasoning advanced by the learned Commissioner in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion has been advanced by Revenue. Thus, it is evident that the Appellant had complied with condition of the Exemption Notifications i.e. the EBP at Vashi Terminal conformed the BIS specification 2796:2000, hence the benefit cannot be denied to them. 15. Before analyzing the issue on applicability of Section 11D to the facts of the present case, it is necessary to reproduce the said provision, as was in force during the disputed period, which reads as below: Section 11D. Duties of excise collected from the buyer to be deposited with the Central Government (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provisions of this Act or the rules made thereunder, every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. 16. As stated above, the Vashi te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise from the buyer of such goods. In the instant case, we find that only a composite price under the administered pricing mechanism has been charged from the buyers under relevant invoices. We do not find any amount has been charged representing the same as duty of excise. Therefore, one of the main ingredient to attract Section 11D is lacking in this case. 18. The learned AR for the Revenue has vehemently argued that the issue is covered by the judgment of this Tribunal in the appellant s own case reported as IOCL Vs. Commissioner of Customs, Vadodara 2011 (263) ELT 698 (Tri-Ahmd). Analyzing the facts and the question of law involved in the said case, we find that there is no similarity between the said case and the appeal before us. In the said case, the assessee received motor spirit through pipeline without payment of duty and also received duty paid ethanol. Both of these are blended together in the ratio of 95% to 5%. In spite of the exemption notification namely, 6//2003-CE, 15/2003-CD and 16/2003-CE all dated 1.3.2003, the appellant paid duty on the entire quantity of Ethanol Blended Petroleum (EBP). They discharged duty on the said Motor spirit (EBP) @ 570 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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