M/S. INDIAN OIL CORPORATION LTD. versus COMMNR. OF CENTRAL EXCISE, VADODARA

Citation: [2010] 13 S.C.R. 358 · Decided: 22-10-2010 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
B 
[2010] 13 (ADDL.) S.C.R. 358 
M/S. INDIAN OIL CORPORATION LTD. 
v. 
COMMNR. OF CENTRAL EXCISE, VADODARA 
(Civil Appeal Nos. 7041-7043 of 2002) 
OCTOBER 22, 2010 
[D.K. JAIN AND T.S. THAKUR, JJ.] 
Central Excise Act, 1944 - Excise duty - On certain 
category of kerosene products - Subjected to concessional 
C 
rate by Notification Nos. 5198-CE and 5199-CE - Kerosene 
product cleared by assessee to industrial consumers -
Entitlement of the assessee to the benefit of concessional rate 
of duty - Held: In view of the object of the Notifications, the 
benefit of concessional rate of duty is available 0nly on the 
D 
kerosene cleared by the assessee to Public Distribution 
System and not to industrial consumers - Central Excise Tariff 
Act, 1985 - Chapter sub-heading 2710.90 - Notification No. 
5198-CE dated 2. 6. 1998 - Notification No. 5199-CE dated 
28.2.1999. 
E 
F 
The appellant-assessee was manufacturer of 
petroleum products, including 'Superior Kerosene'. By 
Notification No. 5/98-CE dated 2.6.1998, a certain category 
of kerosene products i.e. which has smoke point of 18 
mm or more and which is ordinarily used as an illuminant 
in oil burning lamps, were subjected to concessional rate 
of duty. By subsequent Notification No. 5/99-CE dated 
28.2.1999, the rate of the excise duty on the kerosene 
products envisaged und<~r Notification No. 5/98 was 
further reduced. The assessee, who had cleared the 
G kerosene to the industrial consumers, claimed the 
concessional rate of duty under both the Notifications. 
The benefit was denied by the respondent-Department. 
The order was confirmed upto Customs, Excise and Gold 
H 
(Control) Appellate Tribunal. Therefore, the instant 
358 
INDIAN OIL CORPORATION LTD. v. COMMNR. OF 
359 
CENTRAL EXCISE, VADODARA 
appeals were filed. 
A 
Dismissing the appeals, the Court 
HELD: 1. The object of providing concessional rate 
of duty, on the kerosene used for illuminating oil burning 
lamps, was to provide some relief to those economically 
backward sections of society who use kerosene for 
illumination and other domestic purposes and, therefore, 
the benefit of concessional rate of duty was available 
only on the kerosene cleared by the assessee to the 
Public Distribution System. [Para 13] [366-C] 
2. In the light of the object and context of the 
notifications, it becomes abundantly clear that the word 
"ordinarily" used in the Notifications implies that the 
kerosene must be ordinarily used for illumination 
purposes, and it would be immaterial if the kerosene is 
also used for other domestic purposes. [Para 16] [367-8] 
B 
c 
D 
Commissioner of Customs, Mumbai vs. J.D. Orgochem 
Ltd. (2008) 16 SCC 576; Viswa and Co. vs. The State of 
Gujarat (1966) 17 S.T.C. 581 - referred to. 
E 
3. From the perusal of the two Notifications, it is plain 
that the benefit of concessional rate of duty extends only 
to. that variety of kerosene that: (i) has a smoke point of 
18mm or more, and (ii) is ordinarily used as an illuminant 
in oil burning lamps. It is manifest that these two 
conditions are conjunctive and, therefore, the twin 
conditions need to be satisfied in order to avail of the 
concessional rate of duty. In the instant case, the fact that 
.the assessee cleared kerosene manufactured by it to 
industrial consumers would entail that the assessee 
cannot claim the benefit of Notifications No. 5/98-CE and 
5/99-CE. [Para 17] [367-C-D] 
Union of India and Anr. vs. Hemraj Singh Chauhan and 
Ors. (2010) 4 SCC 290; State of A.P. vs. V. Sarma Rao and 
F 
G 
H 
-.. 
360 
SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R. 
A Ors. (2007) 2 sec 159 - relied on. 
B 
c 
Union of India and Ors. vs. Vipinchandra Hiralal Shah 
(1996) 6 sec 721 - referred to. 
Case Law Reference: 
(2008) 16 sec 576 
Referred to 
Para 11 
(1966) 17 S.T.C. 581 
Referred to. 
Para 11 
(201 O) 4 sec 290 
Relied on. 
Para 14 
(1996) 6 sec 121 
Referred to. 
Para 14 
(2001) 2 sec 159 
Relied on. 
Para 15 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 
D 7041-7043 of 2002. 
From the Judgment & Order dated 21.01.2002 of the 
Central Excise & Gold (Control) Appellate Tribunal, New Delhi 
in Appeal No. E/682-684/2001-C. 
E 
Alok Yadav, M.P. Devanath for the Appellant. 
F 
P.P. Malhotra, ASG, S. Wasim A. Qadri, Ron Bastian, Anil 
Katiyar for the Respondent. 
The Judgment of the Court was delivered by 
D.K. JAIN, J. 1. These civil appeals under Section 35L(b) 
of the Central Excise Act, 1944 (for short "the Act) are directe
Excerpt shown. Read the full judgment & AI analysis in Lexace.