Page 193 - ELT_3rd_1st May 2020_Vol 372_Part

2020 ] RELIANCE INDUSTRIES LIMITED v. COMMR. OF C. EX. AND SERVICE TAX, RAJKOT 415

REPRESENTED BY : S/Shri Vipin Kumar Jain, A. Sheeraji and
Ms. Dimple Gohil, Advocates for the Appellant.
Shri T.G. Rathod, Joint Commissioner (AR), for the
Respondent.
[Order per : Ramesh Nair, Member (J)]. - The brief facts of the case are
that the appellant at the relevant time engaged in Manufacture of Motor spirit
falling under Central Excise Tariff Heading 27.10 at its refinery in Jamnagar. The
said Motor spirit was being cleared as such or after addition of 5% Ethanol. Mo-
tor spirit blended with Ethanol was being sold as Motor Spirit (Petrol) at the pet-
rol pumps and outlets where Motor spirit (without Ethanol) was being sold at
same price under the same name of Motor Spirit. The case of the department is
that addition of 5% Ethanol in the Motor Spirit is amounting to manufacture and
accordingly clearance of Motor Spirit blender with Ethanol is liable to Excise Du-
ty. Accordingly, Adjudicating Authority confirmed the demand of Rs.
3,72,06,302/- under Section 11A along with interest with equal amount of penal-
ty under Rule 25 for the period 1-7-2004 to 7-8-2004.
2. Therefore, the present appeal Sh. Vipin Kumar Jain, Learned Counsel
with Sh. A. Sheeraji and Ms. Dimple Gohil Advocates appeared for the appellant.
He submits that the Adjudicating Authority mainly relied upon a Draft Circular
F. No. 84/04/2007-CX for confirming the demand. He further submits that the
draft circular was never issued therefore, the reliance on the Draft Circular is il-
legal and incorrect. He further submits that the effective circular was Circular
No. 83/83/94-CX, dated 31-12-1994, which clarified that addition of Methanol or
Ethanol to Motor Spirit, does not amount to manufacture. It was directed in the
said circular that the pending cases of the issue of mixing of duty paid Ethanol to
the extent of 3% with 97% with paid Duty motor spirit to be decided in the light
of the opinion of the Chief chemist, CRCL, New Delhi. He further submits that
Excise Duty is payable on the value of goods at the time of clearance. According-
ly, duty would have been payable on the value of EBMS, which was cleared from
the appellants factory. The appellant have admittedly paid the duty on Motor
Spirit and Ethanol. Therefore, by virtue of Notifications Nos. 6/2002-C.E., dated
1-3-2002, 28/2002, dated 13-5-2002 and 15/2003-C.E., dated 1-3-2003 basic Excise
Duty, Special Excise Duty and additional Duty of Excise were not payable on
EBMS subject to condition that duty was paid on the Motor Spirit as well as Eth-
anol and that the EBMS was confirming to Bureau of Indian Standard specifica-
tion 2796.This exemptions were effective up to inclusive of 30-6-2004. Between 1-
7-2004 and 3-8-2004, there was no exemption for EBMS. The same was restored
on 4-8-2004 vide Notification No. 38/2004-C.E., 39/2004-C.E. and 40/2004-C.E.
all dated 4-8-2004. Accordingly, during the period 1-7-2004 to 3-8-2004 the appel-
lant was paying the applicable Excise Duties on EBMS on its value at the time of
clearance. On 20-11-2006, the Central Government in exercise of its powers under
Section 11C of the Central Excise Act, 1944 issued a Notification No. 25/2006-
C.E. (N.T.), dated 20-11-2006 whereby it exempted 5% Ethanol blended petrol for
the period from 1-7-2004 to 3-8-2004 subject to the condition that appropriate du-
ties of Excise were paid on 95% Motor Spirit and 5% Ethanol used in the blended
motor spirit.
3. Without prejudice to the above, he further submits that even if the
said draft circular was notified, it could not have been made applicable retro-
spectively for the relevant period i.e. 1-7-2004 to 7-8-2004. It is settled law that the
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