Blending of MS & HSD with additives

whether blending of duty paid branded motor spirit (MS) and duty paid branded HSD with multifunctional additives would amount to manufacture under the Central Excise Act, 1944.

The process of treatment to enhance the marketability of a product or to improve the value addition does not amount to manufacture. Hon ble Supreme Court in the case of CCE v. Sudarshan Chemical Industries (Supra) and Tribunal in the case of Lakme Lever Ltd. vs. CCE and CCE v. Mysore Ammonia Pvt. Ltd., and Hindustan Petroleum Corporation Ltd. vs. CCE, [2009 (162) ECR 0016 (Tri-New Delhi) held, that a process or treatment to enhance the marketability of a product or improve the value addition does not amount to manufacture.

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. Hence, just because blending improves their quality and after blending they are sold under different brandnames, they do not become products different from unblended MS/ HSD, with different characteristics and usages.

The Tribunal held that blending of duty paid branded motor spirit (MS) and duty paid branded HSD with multifunctional additives does not amount to manufacture under the Central Excise Act, 1944