Page 252 - ELT_1_1st April 2020_Vol 372_Part

138 EXCISE LAW TIMES [ Vol. 372

2009 passed by the Commissioner of Central Excise & Service Tax, Patna, where-
by the Commissioner has confirmed a central excise duty demand of Rs.
9,03,61,779/- against the appellant, along with interest thereon under Sections
11A(2) and 11AB of the Central Excise Act, 1944 (“the Act”) respectively. Equiva-
lent amount of penalty of Rs. 9,03,61,779/- has also been imposed under Section
11AC of the Act upon the appellant.
2. The facts of the case in brief are :-
(a) The appellant refines crude oil and markets the finished products
thereof, such as, motor spirit (“MS”) and high speed diesel (“HSD”),
kerosene, petroleum etc. MS and HSD are classifiable under Chap-
ter Sub-heading Nos. 2710.1100 and 2710.1930 respectively.
(b) The appellant also purchases, inter alia, MS and HSD from other
public sector oil companies e.g., Indian Oil Corporation Limited.
Such MS and HSD are excise duty paid, the duty having been paid
by the seller public sector oil companies at the time of clearance.
(c) The appellant has terminals in major locations in the country (stor-
age places) from where the products are further distributed to
smaller locations called depots for ultimate discharge/sale to cus-
tomers. One such storage location is at Paprour in the district of Be-
gusarai in the State of Bihar in respect of which the instant case re-
lates to.
(d) During the period March, 2008 to July, 2008 the appellant purchased
excise duty paid MS and HSD from Indian Oil Corporation Limited,
Barauni (“IOCL”), the manufacturer of the said goods. Upon receipt
thereof in its depot/terminal, the appellant prepared branded MS
and HSD of a part of the received quantities by adding to them mul-
tifunctional additives of extremely small percentages viz., in case of
MS 1000 liters : 0.60 litre and in case of HSD 1000 litres : 1.00 litre.
The said blended MS and HSD are sold by the appellant under the
brand names of “Power” and “Turbojet” respectively. They conform
to ISI specifications, IS 2796-2008 and IS 1460-2005 respectively.
(e) On February 18, 2009, the Commissioner issued a show cause notice
alleging that the process of blending of additives with MS and HSD
resulted in different products, being ‘Power’ and ‘Turbojet’ respec-
tively, which amounted to manufacture of excisable goods by the
appellant at its premises and, consequently, the appellant was liable
to pay central excise duty thereon, amounting to Rs. 9,03,61,779/-,
on the said products cleared during the period May 2008 to July,
2008, which was not paid and hence was recoverable from the ap-
pellant, along with interest under Sections 11A and 11AB of the Act
respectively and that the appellant was liable to penal action under
Section 11AC of the Act and Rule 25 of the Central Excise Rules,
2002.
(f) Adjudication proceedings in terms of this show cause notice, in
which the appellant filed its reply by a letter dated May 5, 2009, re
sulted in the impugned order dated June 30, 2009 of the Commis-
sioner.
3. We have heard Shri S. Chakraborty, Sr. Advocate for the appellant

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