Customs, Excise and Gold Tribunal - Delhi
Rajadhiraj Industries vs Collector Of Central Excise on 29 October, 1993
Equivalent citations: 1994(69)ELT148(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. The question that arises for consideration in this case is whether spent earth, soap stock and acid oil obtained by the appellants during the manufacture of vegetable products were eligible for exemption under Notification No. 115/75-C.E., dated 30-4-1975. In terms of the classification list effective from 28-2-1982 the appellants were paying excise duty on these by-products obtained during the manufacture of vegetable product, under Item 68 of the erstwhile Central Excise Tariff. On 18-6-1984 they filed a claim for refund of duty amounting to Rs. 5,81,481.96 paid on spent earth, soap stock and during the period in April 1982 to March 1984. The Assistant Collector sanctioned the refund of Rs. 61,301.83 in respect of duty paid on the disputed items during the period of 6 months preceding the date of the claim for refund and rejected the claim for the balance amount on the grounds of time-bar. The appellants being aggrieved by the order passed by the Assistant Collector, rejecting their claim for refund of duty amounting to Rs. 5,20,180.13 filed an appeal before the Collector (Appeals) and the Department also challenged the order of the Assistant Collector on the grounds that the items in question not being products of 'Oil Mill' industry were not eligible for exemption under Notification No. 115/75-C.E., dated 30-4-[1975]. By the impugned order the Collector (Appeals) set aside the order passed by the Assistant Collector and allowed the appeal filed by the department on the grounds that the appellants were not eligible for exemption under Notification No. 115/75-C.E., dated 30-4-[1975] since they were producing vegetable product out of oil procured from other parties and could not be deemed as an 'Oil Mill' engaged in the extraction of oil from oil-seeds. In this regard he observed that they were neither recovering oil by crushing of Oil Seeds nor by solvent extraction method.
2. On behalf of the appellants, Shri V. Sridharan, the learned Advocate appeared before us. He stated that the appellants were interested in pursuing the matter only in regard to 'acid oil'. He stated that this matter was covered in the appellant's favour by the Tribunal Order No. 445/90-C, dated 3-4-1990 in the case of Collector of Central Excise and Customs, Jaipur v. Jaipur Oil Products, Jaipur. He added that the Tribunal had allowed the appeal on the ratio of the earlier Order No. 481 and 489/89-C in the case of Collector of Central Excise v. Mehta Vegetable Oil Products (P) Ltd., wherein the Tribunal had rejected the Revenue's contention that benefit in terms of Notification No. 115/75-C.E., dated 30-4-[1975] was admissible only in respect of acid oil which was produced by units which were engaged in both extraction and refining of oil.
3. On behalf of the respondents, Shri Somesh Arora, the learned JDR stated that under Notification No. 115/75-C.E., dated [30-4-1975] goods falling under Item 68 of the Central Excise Tariff manufactured in factories covered by any of the industries specified in the Schedule annexed to the Notification were exempted from the payment of whole of the Central Excise duty. He added that one of the specified industries was "oil mill and solvent extraction industry". Shri Arora submitted that the appellants could not be deemed as an 'oil mill' since the oil required by them for the production of vegetable product was procured from other parties and not by crushing oil seeds in their own factory. He argued that under these circumstances the appellants were not eligible for the benefit in terms of Notification No. 115/75-C.E., dated 30-4-[1975]. He further contended that, the appellants' case was distinguishable on facts from the case of Collector, Central Excise v. Mehta Vegetable Products (P) Ltd., since M/s. Mehta Vegetable Products (P) Ltd., was unit which produced oil by crushing oil seeds. On these grounds he pleaded for the rejection of the appeal.
4. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen that the only question that arises for consideration in this case is whether acid oil generated in the appellants' factory during the course of production of vegetable product out of vegetable oil procured from other parties could be deemed as eligible for exemption from duty under Notification No. 115/75-C.E., dated 30-4-[1975].
5. Under Notification No. 115/75-C.E., dated 30-4-1975 goods falling under Item 68 of the Central Excise Tariff manufactured in factories covered by any of the industries specified in the Schedule annexed to the notification were exempted from the whole of the duty of Central Excise. The Schedule to the notification specified inter alia "Oil Mill and Solvent Extraction Industry" we find that according to the Chamber Dictionary an 'Oil Mill' is a 'grinding mill for expressing oil from seeds'. Since the appellants were not engaged in the production of oil through Solvent extraction process, it follows that they would have been eligible for the benefit in terms of the said notification only if their unit could be deemed as an 'Oil Mill Industry'. From the facts on record we find that the appellants were only engaged in the refining of raw oil obtained from other parties for conversion into vegetable product. Thus the operation of crushing of oil seeds for extraction of raw-oil was not being carried out in their factory. Under these circumstances it has to be held that the disputed goods were not eligible for exemption under Notification No. 115/75-C.E., dated 30-4-[1975].
6. The learned Counsel for the appellants has claimed that the matter had been settled in the appellants' favour by the Tribunal's decision in the case of Order No. 481 and 489/89-C, dated 18-9-1989 in the case of M/s. Mehta Vegetable Products (P) Ltd. We find the decision relied upon by the learned Counsel is distinguishable on facts since the records relating to the case of M/s. Mehta Vegetable Products (P) Ltd. reveal that they were a Composite Unit in which crushing of oil seeds was also undertaken.
6A. In view of the above discussion we see no reason to interfere the order passed by the Collector (Appeals). The appeal is therefore rejected.