JUDGMENT :

G.S. Kulkarni, J.

1. This Appeal under section 35G of Central Excise Act, 1944 (for short “C.E. Act”) challenges an order dated 31 August, 2020 passed by the Central Excise & Service Tax Appellate Tribunal, Mumbai (for short “CESTAT”) whereby the respondent’s appeal against the Order-in-Original dated 29 November, 2013 passed by the Commissioner of Central Excise, Belapur, Navi Mumbai has been allowed. The appellant-revenue has proposed following questions of law for determination of this Court :

“(a) Whether the CESTAT was right in setting aside demand of duty under Section 11 D of the Central Excise Act, 1944 merely because duty attributable to Ethanol is not shown and recovered separately in the invoice and it’s composite cum duty price?

(b) Whether the CESTAT has considered all the findings of the adjudicating authority, who has confirmed the demand of duty under Section 11 D of the Central Excise Act, 1944?”

2. Briefly the facts are: The respondent was registered with Central Excise Department for clearance of petroleum products, namely, Motor Spirit, High Speed Diesel and SKO falling under Chapter 27 of Central Excise Tariff Act, 1985. The respondent received these goods through pipeline from Mumbai Refineries at their Vashi depots and cleared the same to customers. The respondent cleared Ethanol Blended Petrol (EBP) (Gasohol) consisting of by volume 95% Motor Spirit commonly known as petrol and 5% ethanol. The EBP was cleared at concessional rate of duty as per Notification No. 28/2002 dated 13 May, 2002 amended by Notification No. 16/2003 dated 1 March, 2003 read with Notification No. 14/2003 and Notification No. 15/2003, further amended by Notification No. 12/2004 dated 4 February, 2004.

3. The Central Excise Department alleged that the respondent had not complied with the condition of said notifications inasmuch as the EBP did not satisfy the Bureau of Indian Standard’s (BIS) specification 2796:2000, hence, two show cause notices were issued to the respondent for the period April, 2003 to June, 2004 demanding total duty of Rs.13,37,17,740/-. Also a demand notice was issued for recovery of the said amount under Section 11D of C.E. Act alleging that though the duty was collected from the customers but the same was not deposited with the Government.

4. The show cause notices were adjudicated, the demands as made against the respondent were confirmed with interest and penalty. Being aggrieved by the said order, the respondent filed an appeal before CESTAT. The CESTAT by its order dated 7 May, 2013 remanded the matter to the adjudicating authority for de novo adjudication after taking into consideration the test reports submitted by the respondent to establish the product cleared by the respondent conformed to the (BIS) specification 2796:2000. On remand, the adjudicating authority passed Order-in-Original dated 29 November, 2013 as impugned before CESTAT thereby confirming the demand with interest and imposed penalty of Rs.1.00 crore on the respondent. Being aggrieved by such order, the respondent approached the CESTAT assailing the Order-in-Original.

5. Before the CESTAT, the respondent contended that during the relevant period, the respondent had received ‘duty paid Motor Spirit’ from their Refinery and also received ‘duty paid Ethanol’ at their Vashi Terminal. That the Motor Spirit and Ethanol were stored separately in different storage tanks at their Vashi terminal. It was contended that for clearance of EBP, the respondent pumped Motor Spirit as well as Ethanol simultaneoulsy in the ratio of 95% and 5% respectively by volume from the storage tanks, to the road tankers/trucks, which is mixed online. The respondent also contended that the tests carried out on the samples of EBP at their Vashi Terminal even though limited to 9 out of 15 tests, indicated that the EBP confirmed to the BIS 2796:2000 specification and submitted the sample Test Reports conducted at Vashi Terminal to the Department. The respondent also co