Customs, Excise and Gold Tribunal - Delhi
Commissioner Of C. Ex. vs Hindustan Coconut Oil Mills on 1 March, 2000
Equivalent citations: 2000(117)ELT561(TRI-DEL)
ORDER
K. Sreedharan, J. (President)
1. This is an appeal at the instance of the Revenue. Question involved in this appeal is whether coconut oil extracted from copra is liable to levy of cess under the Vegetable Oil Cess Act, 1983 read with Rules made thereunder. The appellate authority, Collector of Customs and Central Excise (Appeals), Calcutta, took the view that coconut oil is not liable to cess. When the appeal by the Revenue came up before a Bench of two Members, that Bench referred the issue to a larger Bench on account of conflicting decisions of Allahabad High Court and Andhra Pradesh High Court relating to rice bran oil.
2. Before dealing with the issue in detail, it is worthwhile to consider the various enactments that imposed cess on produce obtained in India. The first Act by which cess was imposed is the Produce Cess Act, 1966. Section 3(2) of that Act provided that there shall be levied and collected as cess on every produce specified in column 2 of the Second Schedule, a duty of excise at the rate notified by the Central Govt, in the Official Gazette. Section 4 of that Act, inter alia, cast liability to pay cess on the occupier of the mill in which such produce is consumed or extracted. By virtue of this provision, oil millers who were extracting coconut oil from copra were liable to pay cess under the Produce Cess Act, 1966. While so, Coconut Development Board Act, Act 5 of 1979 was enacted. By that Act Coconut Development Board was constituted for the development of coconut industry in India. "Coconut" was defined as per this Act as meaning the fruit of coconut palm including green coconut, ripe coconut and copra. "Coconut industry" was defined under Section 3(d) as under :-
"(d) "coconut industry" does not include -
(i) Coir industry, or
(ii) an industry from which products (including by-products), out of coconut oil are manufactured."
As per clause (ii) above, an industry which produces any object out of coconut oil will not form coconut industry. The definition makes it clear that an industry which produces coconut oil will be a coconut industry. This enactment, namely, Act 5 of 1979 provided for constitution of Coconut Development Fund. It states that the said fund must come out of the proceeds of cess created under Section 4 of the Copra Cess Act, 1979. Copra Cess Act, Act 4 of 1979 was enacted for the following objects and reasons :-
"The Bill is complementary to the Coconut Development Board Bill, 1978. The Coconut Development Board Bill, 1978 seeks to provide for the development under the control of the Union, of the Coconut industry (excluding coir and coconut oil products industry). For the purpose, the Bill seeks to provide for the establishment of a Board to be called the Coconut Development Board. In order to ensure that the said Board has the necessary resources to discharge its functions, the Bill seeks to provide for the imposition of a cess on copra. At present the cess on copra is being levied under the Produce Cess Act, 1966 (15 of 1966) at the rate of 60 paise per quintal. The Bill empowers the Central Government to levy cess on copra at a maximum rate of Rs. 5 per quintal. In view of this provision, copra is being excluded from the Second Schedule to the Produce Cess Act, 1966 by suitably amending the Act. The intention is to make over, after due appropriation by Parliament, by law, such amount as the Central Government may deem fit, to the Coconut Development Board, so as to enable it to discharge its functions effectively.
2. The Bill seeks to achieve the above objects."
Section 2(c) of that Act defined "copra" as dry kernel of coconut including edible copra and desiccated coconut. Section 2(f) defined "oil" as oil extracted from copra. Section 3 of the Act imposed cess. As per this Section, cess is leviable on copra consumed in any mill in India, with a view to producing or manufacturing any goods therefrom, not exceeding Rs. 5.00 per quintal. The liability to pay the cess is on the occupier of the mill in which copra is consumed. Copra is consumed in mills only for extraction of coconut oil.
3. While copra was subjected to cess under the Produce Act of 1966, Act 15 of 1966, Copra Cess Act, Act 4 of 1979 and Coconut Development Board Act, Act 5 of 1979 were enacted. By the subsequent enactments, copra and coconut oil were taken outside the purview of the Produce Cess Act, 1966. While so, National Oil Seeds and Vegetable Oils Development Board Act, 1983, Act 29 of 1983 was enacted. Section 3(c) therein defined "coconut" as having the same meaning as in the Coconut Development Board Act, 1979. Section 3(f) defined "oil seed" as not including coconut. "Vegetable Oil" was defined under Section 3(h) of the Act in the following terms :-
"3(h) 'vegetable oil' means any oil produced from oilseeds or any other oil bearing material of plant origin, containing glycerides but does not include any such vegetable oil which has been subjected to any processing subsequent to the recovery of oil."
The learned representative of the department, arguing the case on behalf of the Revenue, submitted that even though the first part of the definition of vegetable oil will not take in coconut oil because of the definition of the word "oil-seed" in clause (f), second part will squarely apply to coconut oil. This argument is on the basis that coconut oil is extracted from material of plant origin. It also contains glycerides, and coconut oil is not subjected to any processing subsequent to the recovery of it from copra. Therefore, coconut oil, it is argued, squarely falls within the definition of vegetable oil in Section 2(h) of the National Oil Seeds and Vegetable Oils Development Board Act, 1983. This being the position, he proceeds to argue that coconut oil is also subject to levy and collection of cess as provided by the Vegetable Oil Cess Act, 1983, Act 30 of 1983. Section 2(2) of Act 30 of 1983 states that:
"Words and expressions used but not defined in this Act and defined in the National Oilseeds and Vegetable Oils Development Board Act, 1983, shall have the meanings respectively assigned to them in that Act."
So, the definition of vegetable oil given in Act 29 of 1983 must apply to the provisions contained in Act 30 of 1983. As per Section 3 of the Vegetable Oil Cess Act, 1983, duty of excise on vegetable oils produced in any mill in India at such rate not exceeding Rs. 5.00 per quintal of vegetable oil shall be levied and collected. Consequently, it is contended that coconut oil is also subject to cess leviable under the Vegetable Oil Cess Act, 1983.
4. While enacting the Coconut Development Board Act, 1979 and the Copra Cess Act, 1979, the Parliament provided for the creation of a Board known as Coconut Development Board and for its finance to levy cess. There is nothing on record to show that coconut and coconut oil were further taken out of these enactments and were brought within the ambit of National Oil Seeds and Vegetable Oils Development Board Act, 1983 and the Vegetable Oil Cess Act, 1983. A reading of the enactments of 1983 makes it clear that coconut is outside the purview of these enactments. While defining vegetable oils, oil produced from oilseeds as defined in that Act alone is taken in. But if the definition is stretched and coconut oil is brought under the second limb of the definition as being of plant origin, the very object and purpose of the provisions contained in Coconut Development Board Act, 1979 and Copra Cess Act, 1979 will be defeated. The provisions of 1979 Act are specifically concerned with coconut and copra. The general provisions contained in the 1983 Act cannot be construed in a manner nullifying these special enactments. Parliament was aware of the provisions contained in the 1979 enactments when they were enacting the 1983 Acts. No provision was incorporated in the subsequent Acts to take within their scope coconut and copra. Definition Section shows that Parliament did not want to include coconut and copra within the ambit of the new enactments. Viewed in this light, we are clear in our mind that the contention raised by the Revenue in the case cannot be sustained. We hold that coconut oil extracted from copra is not liable to cess under the Vegetable Oil Cess Act, 1983.
5. In the light of the conclusions reached by us in the earlier paragraphs, question whether rice bran oil satisfies the definition of vegetable oil is not of any consequence for the decision on the issues before us. Allahabad High Court and Andhra Pradesh High Court took contradictory views on the question whether rice bran oil is vegetable oil. Since that issue has nothing to do with the facts of this case, we hold that those decisions are not of any assistance to us in deciding this appeal.
6. In view of what has been stated above, the appeal preferred by the Revenue is dismissed holding that coconut oil extracted from copra is outside the purview of Vegetable Oil Cess Act, 1983, Act 30 of 1983.