Per: BENCH

This appeal has been filed by M/s. Hindustan Petroleum Corporation Ltd., Mahul, Mumbai (herein after, referred to as “the appellants”, for short) assailing the Order-in-Appeal No. CD/448/M-II/2016 dated 07.04.2016 (herein after, referred to as “the impugned order”) passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-II, Mumbai.

2. Central Board of Indirect Taxes & Customs (CBIC), Ministry of Finance have issued Notification No. 02/2017-Central Tax dated 19.06.2017, as amended, for prescribing territorial jurisdiction of Principal Commissioners/ Commissioners of Central Goods and Service Tax & Central Excise for various Commissionerates across the country in exercise of the powers vested on them read with it under Sections 3 and 5 of the Central Goods and Services Tax Act, 2017 read with Section 139 ibid. As per the said notification dated 19.06.2017, each of the Commissionerate is provided with specific jurisdiction, which inter alia contain particular Postal Index (PIN) code numbers for the areas covered and tax payers falling under such area, who are covered under the existing laws of Central Excise Act, 1944; Finance Act, 1994. Therefore, considering the aforesaid legal provision and that the appellant is presently functioning under the jurisdiction of the Central Goods and Service Tax authorities, the revised name and address of the respondent department has been suitably incorporated. The Registry is also directed to incorporate the following changed name and address of the respondent/appellant department in the appeal records for the purpose of disposal of the appeal, as “Commissioner of Central Goods and Services Tax & Central Excise, Navi Mumbai Commissionerate, 16th Floor, Satra Plaza, Sector-19D, Palm Beach Road, Vashi, Navi Mumbai – 400 075.”.

3.1 Brief facts of the case, leading to this appeal, are summarized herein below:

3.2 The appellants herein are engaged inter alia, in the manufacturer of petroleum products by refining of crude petroleum and marketing of various finished products viz., High-Speed Diesel (HSD), Motor Sprit (MS), Superior Kerosene Oil (SKO), Aviation Turbine Fuel (ATF), Lube Oil etc. by classifying the aforesaid products under Chapter 25, 27 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants are registered taxpayers holding Central Excise Registration No. AAACH1118BXM010 for manufacture of aforesaid excisable goods on payment appropriate Central Excise duty and for compliance with Central Excise statue.

3.3 The excisable goods viz., HSD, MS and SKO manufactured at Mahul refinery are transported to their different depots situated at Vashi, Pakni, Lone and Hazarwadi, where sales to retailers takes place. This is also referred to as Pipeline Transfer (PLTs). The pipeline transfers of aforesaid goods on payment of applicable duty and dispatch of such goods are made by the appellants in the form batch of shipments, following a sequential product-to-product pumping method, whereby at any one point of time only one product in the pipeline is pushed through. However, upon completion of pumping of one product, say HSD or MS, the other product i.e., SKO is introduced in the pipeline which pushes the other product without any positive segregation. Therefore, the line connected of each consignment of the products may comprise of a mixture of two products, during the time of shifting from one product to another, which is known as “interface” or “transmix” at the inter-junction of each batch of product. Such interface/transmix/intermix products are taken into specific tanks at the destination as per laid down safety norms and operational procedures as prescribed under Industry Quality Control Manual (ICQM).

3.4 As a conventional practice, the appellants were using SKO as an interface between MS and HSD, since intermixing MS and HSD or HSD and MS will contaminate the entire product. The Department had interpreted that the offsetting of gain observed in one