M/s Indian Oil Corporation Ltd. had availed exemption under Notification No. 120/84-CE dated 11.5.84 in respect of clearances of circulating oils and hydraulic oils from refinery situated at Trombay. SCN's were issued for imposition of penalty on the ground that these oils were not ordinarily used as lubricating oils.

2.     The Notification No. 120/84-CE dated 11.5.84 as amended exempt blended or compounded lubricating of mineral oils or by blending or compounding of mineral oils with any other ingredients. As the circulating oils and hydraulic oils are not ordinarily used as lubricating oils, the same were not entitled to exemption under Notification No. 120/84. Accordingly, the jurisdictional Commissioner confirmed the demand of duty of Rs. 24.91 crores and imposed penalty of Rs. 2.00 crores.

3.     Against the Commissioner's order, M/s IOC had filed an appeal before the CEGAT and they approached the Committee of Disputes to seek permission to pursue their appeal (a copy of brief submitted by M/s IOC to COD is enclosed as Annexure 'A')*. The matter was discussed in the meeting of the COD held on 13.6.1996. The matter was discussed in the meeting of the COD held on 13.6.1996. The decision of the COD was as below:

"The Committee having regard to the fact that there were no question of law and fact involved in the dispute, did not permit Indian Oil Co. to pursue their appeal in CEGAT."

In view of the decision of COD, it is clear that circulating oils and hydraulic oils are not ordinarily used as lubricating oils and, therefore, not entitled to exemption under Notification No. 120/84.

4.     In the aforesaid regard, the Board observes that it is quite likely that some other units might have cleared circulating oil and hydraulic oils as lubricating oils. The position in this regard needs immediate verification, necessary action, and report in due course.

5.     The receipt of this communication may please be acknowledged.

6.     This issues with the approval of Member (CX).