1994 (12) TMI 74 - SC - Central Excise

Whether the appellants are entitled to the benefit of the exemption afforded by the aforesaid Notification No. 61/71, dated 29-5-1971, as amended by Notification No. 40/72, dated 17-3-1972? Held that - Keeping the related words of as is in mind, it appears to us that the natural and proper meaning to be given to the enacting or main clause of the notification is, that the Central Government exempts such vegetable product, to the extent it is made or as shown to be made or as represented to be made or as seen made , from indigenous rice bran oil. The title itself is exemption to vegetable product produced out of indigenous rice bran oil . It can only mean that the quantity of rice bran oil contained in the vegetable product is exempt. The Appellate Tribunal has considered the matter at great length in paragraphs 9 10 of its order placing emphasis on Notification as a whole and the two conditions following the enacting or main clause. We are of the view that the conclusion arrived at by the Tribunal is valid and tenable. The conclusion follows either by construing the plain language of the main clause alone or by construing the entire notification alongwith the conditions. No interference is called for with the decision rendered by the Appellate Tribunal. Appeal dismissed.

Summary

Issues:
Interpretation of Notification No. 61/71 dated 29-5-1971 as amended by Notification No. 40/72 dated 17-3-1972 under the Central Excises and Salt Act, 1944.

Detailed Analysis:

Issue 1: Interpretation of Notification No. 61/71 and 40/72
The case involved the interpretation of Notification No. 61/71 dated 29-5-1971 as amended by Notification No. 40/72 dated 17-3-1972 under the Central Excises and Salt Act, 1944. The dispute arose regarding the applicability of an exemption granted to vegetable products produced from indigenous rice bran oil. The appellant claimed the benefit of the exemption, while the revenue contested the interpretation of the notification. The Appellate Tribunal analyzed the conditions of the notification and concluded that the benefit of exemption is available for vegetable products made from rice bran oil in an admixture with other oils, subject to certain conditions. The Tribunal emphasized that the vegetable product must contain a component attributable to rice bran oil to qualify for the exemption.

Issue 2: Construction of the Notification
The Supreme Court examined the language of the Notification and emphasized the phrase "such vegetable product as is made from indigenous rice bran oil" to determine the scope of the exemption. The Court interpreted the notification to mean that the exemption applies to the quantity of rice bran oil contained in the vegetable product. The Court upheld the Tribunal's decision, stating that the exemption is specifically for vegetable products made from rice bran oil, and the condition of the quantity of rice bran oil in the product must be satisfied for the exemption to apply.

Issue 3: Ambiguity in Exemption Provision
The appellant argued that the exemption should apply to the entire quantity of the admixture of vegetable products produced from rice bran oil, as long as the rice bran oil content exceeds 1% of the total. However, the Court rejected this interpretation, stating that in cases of ambiguity in a fiscal statute, any doubt regarding an exemption provision should be resolved in favor of the revenue, not the assessee. The Court cited a previous decision to support this principle and concluded that the appellant was not entitled to relief based on this argument.

In conclusion, the Supreme Court dismissed the appeals and upheld the decision of the Appellate Tribunal regarding the interpretation of the exemption notification. The Court clarified that the exemption applies to vegetable products made from indigenous rice bran oil, with the quantity of rice bran oil in the product being a crucial factor in determining eligibility for the exemption.