Page 194 - ELT_3rd_1st May 2020_Vol 372_Part

416 EXCISE LAW TIMES [ Vol. 372

circular which is adverse to the assessee cannot operate retrospectively (Suchitra
Components Ltd. v. C.C.E. 2007 (208) E.L.T. 321 S.C.). He further submits that
merely because an exemption Notification existed for EBMS cannot by itself
mean that process of blending of Ethanol with Motor spirit tantamounts to man-
ufacture. It is settled law that mere mention of product in the tariff or in an ex-
emption will not sufficient to hold that it is the result of process of manufacture.
He placed reliance on the judgment in the case of UOI v. Ahmedabad Electricity,
2003 (158) E.L.T. 3 (S.C.), New Shorrock Mills v. C.C.E. 2005 (190) E.L.T. 35.
4. The question whether a process amount to manufacture or not has to
be decided by applying the tests laid down by the Hon’ble Supreme Court in the
case of JG Glass Industries 1998 (97) E.L.T. 5 (S.C.). Therefore, blending of Motor
Spirit with Ethanol does not lead to the manufacture of a new product with dif-
ferent characteristics or commercially. He placed reliance upon judgment of this
Tribunal in the case of Hindustan Petroleum Corporation v. C.C.E. 2009 (234) E.L.T.
648 that the mere blending of motor spirit with small quantities of additives to
improve the quality of Motor Spirit to reduce emissions levels does not amount
to manufacture. Since even after addition, Motor spirit continues to be used as
motor spirit. The ratio of the judgment squarely applies in the facts of the present
case.
5. Without prejudice he also submits that the appellant has during the
relevant period paid duty on the last stage of value addition. It has always been
the appellants policy to collect duty on the last stage following the “later the bet-
ter” principle. In such a situation demand of duty at an intermediate stage of
production is not sustainable. In this regard he placed reliance on the judgment
reported at C.C.E. v. Andhra Pradesh Straw Board Mills, 1991 (53) E.L.T. 15 (Tri.)
which was affirmed by the Supreme Court and reported at 1997 (89) E.L.T. A37
(S.C.).
6. Sh. T.G. Rathod, Learned Joint Commissioner (Authorized Repre-
sentative) appearing on behalf of the appellant reiterates the finding of the im-
pugned order.
7. We have carefully considered the submission made by both the sides
and perused the records. We find that among other findings the Learned Adjudi-
cating Authority has heavily relied upon the Draft Circular F. No. 83/04/2007-
CX which intended to withdraw the Circular No. 83/83/94-CX, dated 13-12-1994
which circular was heavily relied upon by the appellant. In this regard we are of
the view that the draft circular which was never issued as a circular should be
completely ignored and no reference can be drawn from such circular. Since the
draft circular was not issued the Circular No. 83/83/94-CX, dated 13-12-1994
was continued and effective. Therefore, the finding of the Learned Adjudicating
Authority based on the draft circular is not sustainable. In this situation we are of
the view that the entire matter needs to be given a relook by considering the var-
ious alternative submission made by the appellant.
8. Therefore, we set aside the impugned Order and allow the appeal by
way of remand to the Adjudicating Authority for passing a fresh order, after fol-
lowing the Principle of Natural Justice such as considering the submissions
made/to be made by the appellant and granting the sufficient Personal hearing.
(Pronounced in the open Court on 28-11-2019)
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