1980 (10) TMI 76 - CGOVT - Central Excise

Summary

Issues:
1. Classification of goods under Central Excise Tariff - whether under tariff item 13, tariff item 12, or the residuary tariff item 68.

Analysis:
The case involved a company manufacturing Nickel Catalyst using hardened groundnut/cotton seed oils at their factory in Bombay. Initially, the company classified the goods as excisable under tariff item 13, covering vegetable products. However, they later claimed that the goods were non-excisable, stating that the oils, after certain processes, should be classified under tariff item 12, covering vegetable non-essential oils. The Jurisdictional Superintendent of Central Excise classified the goods under tariff item 13, a decision upheld by the Appellate Collector.

Upon hearing, the Legal Manager argued that the goods were unfit for human consumption and should not be classified under tariff item 13. Referring to a Supreme Court judgment, it was contended that hydrogenated oil retains its character as oil and should be classified under tariff item 12. The Government considered these arguments, along with expert opinions and legal provisions.

The Government observed that tariff item 13 covers vegetable products fit for human consumption, with specific melting point requirements. Expert testimony confirmed that the goods in question were unsuitable for human consumption, aligning with the standards set by relevant regulations. Consequently, the Government accepted the company's contention that the goods did not fall under tariff item 13.

Regarding classification under tariff item 12, the company cited a Supreme Court judgment on a sales tax case. However, the Government emphasized that interpretations in one statute may not directly apply to another. They highlighted the distinction between vegetable non-essential oils (tariff item 12) and vegetable products (tariff item 13) under the Central Excise Tariff. The Government concluded that the goods did not fit under tariff item 12 either.

As neither tariff item 12 nor tariff item 13 applied, the Government classified the goods under the residuary tariff item 68. Citing a relevant High Court case, it was established that similar goods with specific melting points were unfit for human consumption and fell under the residuary tariff item. The order of the Appellate Collector was set aside, and the goods were classified under tariff item 68 for excise duty purposes.