IOC LTD. Vs. COMMR. OF C. EX., GUNTUR

JUDGEMENT

(1.) The appellant is a PSU unit. They have obtained clearance from the Committee of Secretaries. The assessee is manufacture of Petroleum Products viz., High Speed Diesel (HSD) Oil, Motor Spirit (MS) and Superior Kerosene Oil (SKO). They were also manufacturing several other products, namely Ethanol Blended Motor Spirit in the premises. The manufacturing process of Ethanol Blended Motor Spirit is by mixing 5% ethanol and 95% motor spirit. The product Ethanol Blended Petrol is classifiable under Chapter Heading No. 27.10 of the First Schedule to the Central Excise Tariff Act, 1985 and is chargeable to duty of 16% ad valorem in terms of First Schedule to the Central Excise Tariff Act, 1985; Special Duty of Excise of 16% under Second Schedule to the Central Excise Tariff Act, 1985; Additional Duty of Excise of Rs. 1500/ - per KL in terms of Section 111 of the Finance Act, 1998; and Special Additional Duty of Excise amounting to Rs. 6,000/ - per KL under Section 147 of the Finance Act, 2002. There is also Education Cess @ 2% on the aggregate of duties under Section 91 of the Finance Act, 2004. The appellants claimed the benefit of exemption in terms of Notification No. 15/2003 and 12/2004 dated 4 -2 -2004 and cleared the product Ethanol Blended Motor Spirit to various retail outlets without payment of duty. The Revenue had proceeded to demand duty on this product for contravention of various provisions of the Central Excise Rules, 2002. The appellant contested the case and submit that the duty is not leviable as the said product was exempted one and it cannot be interpreted in a manner so as to create a duty liability, where none existed under the tariff arm. However their pleas were turned down and the demands were confirmed. The learned Counsel submits that the matter was taken up for granting exemption and ultimately the Government of India had issued a Notification No. 25/2006 -C.E. (N.T.) dated 20 -11 -2006 under Section 11C of Central Excise Act in this regard. Therefore the demands are required to be set aside.

(2.) THE learned SDR files para -wise comments from the Commissioner who admitted the said notification. The learned SDR submits that the appeal can be allowed in terms of the Notification dated 20 -11 -2006 under Section 11C of the Central Excise Act.

(3.) ON a careful consideration of the submissions made by both the sides and on perusal of the Notification dated 20 -11 -2006, we find that the Government has exempted the levy of duty on the subject product. In view of this position, the stay application and the appeal are allowed. (Pronounced and dictated in the open Court)