Lubricating Oils and Greases Manufactured by Balmer Lawrie Eligible for Exemption: CESTAT [Read Order]

Balmer Lawrie and Company Limited, based in Kolkata, manufactured lubricating oils and greases and claimed exemption under Notification No. 120/84-CE. The department denied the benefit, stating that the exemption applied only to goods under Chapter 27 and not to those under Heading 34.03.

The adjudicating authority and the Commissioner (Appeals) both confirmed the demand. On appeal, the Tribunal in 2004 had remanded the matter, directing the authorities to verify whether the goods satisfied the definition in the notification and were ordinarily used as lubricants.

Read More: Commission Income from Business Auxiliary Services Liable toService Tax, Not Covered under Negative List: CESTAT [Read Order]

In the remand proceedings, the Deputy Commissioner again denied the exemption, relying on the Chief Chemist’s opinion. The Commissioner (Appeals) upheld the order in 2024, leading the appellant to approach the tribunal once more.

The appellant’s senior counsel, J.P. Khaitan, argued that the exemption notification did not restrict its scope to any tariff heading and applied to all lubricating oils and greases obtained by blending or compounding mineral oils.

Read More: Non-Filing of ST-3 is Positive Act of of Evading tax: CESTATholds Extended Limitation Rightly Invoked [Read Order]

The revenue counsel supported the findings of the lower authorities and maintained that only Chapter 27 goods qualified for the exemption.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that the lower authorities failed to follow the tribunal’s earlier directions. It observed that the notification did not mention any tariff heading and granted exemption to all lubricating oils and greases obtained by blending mineral oils.

Catalyst Decoder: Turning Questions into Clarity! Click here

The tribunal pointed out that the authorities ignored this evidence and relied only on the Chief Chemist’s interpretation, which carried no weight. It also explained that other manufacturers producing similar goods had been granted the same benefit.

Holding that Balmer Lawrie’s products fulfilled the notification’s conditions, the tribunal set aside the impugned orders and quashed the demand and penalty. The appeals were allowed with consequential relief.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates