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2020 ] HINDUSTAN PETROLEUM CORPORATION LTD. v. COMMR. OF C. EX., PATNA 139

and Shri S.S. Chattopadhyay, Supdt. (AR) for the Revenue and have perused the
materials on record.
4. The issue which arises for decision in the instant case is whether
blending of MS and HSD with small quantity of multi-functional additives to
make branded MS and HSD respectively amounts to “manufacture” within the
meaning of Section 2(f) of the Act.
5. This issue has been decided in a large number of decisions of the
Tribunal, all of them holding that there was no “manufacture” within the mean-
ing of the Act in the said activity of blending of MS and HSD with multi-
functional additives to make branded MS and HSD. Though appeals have been
preferred against some of the orders passed by the Tribunal by the Revenue be-
fore the Hon’ble Supreme Court of India, no stay of any of the impugned orders
of the Tribunal has been granted. As such the subject orders passed by the Tri-
bunal continue to remain in force and applicable. Two of the decisions of the Tri-
bunal have been passed in appeals filed by the appellant itself, pertaining to its
units situated in other parts of the country.
6. In the case of Hindustan Petroleum Corporation Limited v. Commissioner
of C. Ex., Delhi and Rohtak, 2009 (234) E.L.T. 648 (T), the Principal Bench of the
Tribunal dealt with the self-same issue in the appellant’s own case and has held
as under :-
“4. We have carefully considered the submissions from both the sides.
The appellants bring duty paid MS and HSD to their Depots/Installations
where a part of such MS/HSD is blended with MFAs and sold as branded
MS/branded HSD under brand names like “Speed”, “Power”, “Turbojet”
etc. The branded MS/HSD are claimed by the Appellants to increase the
engine efficiency by reducing the formation of carbon deposits and accord-
ingly are sold at a premium. The point of dispute in this group of appeals is
as to whether the process of blending ordinary MS/HSD with very small
quantity of MFAs (0.04% to 0.06%), to make branded MS/HSD amounts to
manufacture. After considering the rival contentions on this point, we, for
the reasons given below, hold that this process does not amount to ‘manu-
facture’ and hence would not attract any central excise duty.
4.1 The MS and HSD after being blended with small quantity of MFAs
remain MS and HSD only, conforming to ISI specifications IS : 2796-2000
and IS : 1460-2000 respectively. Just because blending improves their quali-
ty and after blending they are sold under different brand names like
‘Speed’, ‘Power’, ‘Turbojet’ etc. They do not become products different
from unblended MS/HSD, with different characteristics and usages. Their
characteristics remain the same, as they both have to conform to the ISI
specification for unblended MS/HSD and their usage also remain the same.
Hon’ble Supreme Court in its judgment in case of CCE v. Sudarshan Chemi-
cal Industries (supra) and this Tribunal in its judgments in cases of Lakme
Lever Ltd. v. CCE (supra) and CCE v. Mysore Ammonia Pvt. Ltd. (supra) has
held that a process or treatment to enhance the marketability of a product
or improve the value addition does not amount to manufacture. In this
case, the blending only improves the quality of the MS/HSD resulting in
better value addition, without charging the basic characteristics and usages
of the products.

EXCISE LAW TIMES  1st April 2020  301