2005 (3) TMI 361 - AT - Central Excise

Summary

Issues:
Availability of benefit of exemption Notification No. 115/75 to the appellants.

Analysis:
The appeal was filed against the impugned order-in-original, focusing on the availability of the benefit of exemption Notification No. 115/75 to the appellants. The appellants are involved in the production of Rice Bran Oil through a solvent extraction process and produce various by-products during the refining process. The denial of the benefit of the notification was based on the appellants not carrying out 100% extraction of rice bran oil for producing refined vegetable oil and the other by-products not being covered by the notification.

Upon review of Notification No. 115/75, it was found that goods falling under the Schedule to the Central Excise Tariff Act, 1985, and manufactured in factories specified in the Schedule were exempt from excise duty. The appellants' factory fell under the category of 'Oil Mill and Solvent Extraction Industry,' which was not disputed. The Revenue contended that the appellants purchased some raw rice bran oil from outside during the disputed period, which led to the denial of the exemption. However, the notification did not impose a condition that the entire extraction of raw rice bran oil must be carried out in the factory by the manufacturer to claim the exemption.

The Tribunal referred to a similar case where the benefit of the same notification was allowed even when 100% extraction was not carried out within the factory. The Apex Court's observation in another case emphasized that exemption notifications cannot be interpreted by adding conditions not explicitly mentioned. Therefore, the appellants could not be legally denied the benefit of the exemption notification for refined edible oil and other by-products. The duty demand and penalty imposed on the appellants were set aside, and the appeal was allowed with consequential relief as per law.