- (1.) THESE are two Appeals, under Section 35G of the Central Excise and Salt Act, 1944 (hereinafter referred to as the 'Act'), challenging the order dated 2nd July, 2013, rejecting the Miscellaneous Applications filed by the appellants and maintaining the order dated 1st October, 2012, passed on the Applications, filed under Section 35 of the Act. Appeal No. 224 of 2013 is being filed by the appellant, M/s. IFP Petro Products Private Limited and the Appeal No. 225 of 2013 is being filed by Sri Anant Bhargava, the Director of the Company.
(2.) BRIEFLY stated, the facts giving rise to the present Appeals are that the appellant No. 1 is a Private Limited Company, incorporated under the Indian Companies Act, (hereinafter referred to as the 'Company'), engaged in the activity of procuring lubricant oil in bulk from M/s. Indian Oil Corporation and Bharat Petroleum Corporation (BPCL) and repacking the same in the containers and returning the same to the original manufacturer on the payment of duty. The appellant is paying the duty on such manufactured product and there is no dispute in this regard. The second activity of the Company is that the appellant procures various waste/used oil from various service stations, like, M/s. Honda and M/s. Maruti Udyog etc. and is involved in the processing of such oil employing the process of dehydration, distillation, clay polishing and filtration etc. By means of the aforesaid processing, impurities etc. are being removed from the used/burnt oil. The oil so obtained from such waste/used oil is being packed and sold as base oil, lubricating oil and transformer oil etc. to the consumers. Such lubricating oil appears to be covered under Chapter 2710 of the Central Excise Tariff. For the period in dispute, the Company could not pay the Central Excise duty on the processed oil on the ground that the processing involved in obtaining such oil does not amount to manufacturing within the ambit of Section 2(f)(ii) of the Act. According to the Department, the processing of such oil, referred hereinabove, amounts to manufacture, in view of Note 4 of Chapter 27. According to the Department, the process undertaken by the Company, in respect of the waste oil, is adoption of a treatment to render the product marketable to the consumers and hence amount to manufacture by virtue of Section 2(f)(ii) of the Act, read with Note 4 of Chapter 27. Accordingly, a show -cause notice dated 11th April, 2011 was issued to the Company for a demand of duty to the tune of Rs. 1,92,02,127/ -, in respect of the clearance of the lube oil etc. during the period from 2006 -07 to 2010 -11 (October 2010), along with the interest thereon and also for imposition of penalty on the Company as well as on Sri Anant Bhargava, Director of the Company. Subsequently, another show -cause notice, dated 29th November, 2011 was issued for the subsequent period from 1st November, 2010 to 31st August, 2011, raising a demand of duty to the tune of Rs. 62,80,045/ -, along with the interest thereon and also for imposition of the penalty on the Company as well as on its Director.
(3.) THE Company as well as the Director of the Company filed the replies to the show cause notice. The Commissioner, Central Excise, Ghaziabad vide its order dated 23rd February, 2012, treated the process undertaken by the Company, referred hereinabove, in respect of the waste oil as manufacturing, in terms of Section 2(f)(ii) of the Act, read with Note 4 of Chapter 27 of the Central Excise Tariff and upheld the total duty demanded at Rs. 2,54,82,272/ -, along with interest thereon, under Section 11 -AB and besides it imposed a penalty of equal amount under Section 11 -AC and further imposed a sum of Rs. 10 lakh towards the penalty on Sri Anant Bhargava, the Director of the Company under Rule 26 of the Central Excise Rules, 2002. Against the order of the Commissioner, the Appellant No. 1 as also the Appellant No. 2, both, filed two Appeals, being Appeal Nos. 1350 and 1351 of 2012, along with the Stay Applications, being Stay Application Nos. 1714 and 1715 of 2012, respectively, under Section 35 -F of the Act.;