Blending of 5% ethanol with 95% motor spirit forming EBMS doesn’t amount to manufacture

Reliance Industries Ltd. Vs C.C.E. & S.T.-Rajkot (CESTAT Ahmedabad)

Appellant blended 5% ethanol with 95% motor spirit to form EBMS – such blending doesn’t amount to manufacture – final duty payable on EBMS.

Facts- The appellant is engaged in the manufacture of Motor spirit. The motor spirit is blended with Ethanol for the purpose of reducing Carbon Monoxide and consequent air pollution. The ethanol blended motor spirit (EBMS) was being cleared by the appellant to comply with requirement laid down by the Ministry of Petroleum and Natural Gas. The appellant paid the duty at the time of removal of ethanol blended motor spirit on its clearance value.

It was alleged that there was no exemption on EBMS for the period 01.07.2004 to 07.08.2004. Further it was also alleged that circular dated 02.01.2003 uses the word manufacture for the process of blending 5% ethanol with 95% motor spirit to produce EBMS.

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