1990 (4) TMI 154 - AT - Central Excise

Summary

Issues:
- Interpretation of the Vegetable Oils Cess Act, 1983
- Applicability of the definition of 'vegetable oil'
- Cess on vegetable oil production

Interpretation of the Vegetable Oils Cess Act, 1983:
The case involved an appeal by M/s. Jayalakshmi Cotton & Oil Products Pvt. Ltd. against an order passed by the Collector of Central Excise (Appeals), Madras. The appellants had paid a cess on oil produced at Rs. 5/- per quintal in January and February 1984, seeking a refund later on the grounds that they were not required to pay the cess. The dispute centered around the interpretation of the Vegetable Oils Cess Act, 1983, which provided for the levy and collection of a cess on vegetable oils for the development of the oilseeds industry and vegetable oils industry. The appellants argued that no cess could have been levied until the enforcement of Act No. 29 of 1983, which defined 'vegetable oil'. However, the tribunal rejected this argument, holding that cess could be collected under the provisions of Act No. 30 of 1983 even without the specific definition of 'vegetable oil'.

Applicability of the definition of 'vegetable oil':
The definition of 'vegetable oil' under Act No. 29 of 1983 excluded any oil that had been subjected to processing subsequent to the recovery of oil. The appellants contended that since they were processing crude vegetable oil extracted from oilseeds, the cess was not applicable to their case. However, the tribunal ruled that the definition of 'vegetable oil' encompassed any oil produced from oilseeds, including crude oil, and that cess could be legitimately collected on such oil. The tribunal emphasized that the definition excluded processed oil, not crude oil as extracted from oilseeds, thereby rejecting the appellants' argument.

Cess on vegetable oil production:
Ultimately, the tribunal upheld the impugned order and dismissed the appeal, finding no merit in the appellants' contentions. It was established that the appellants had produced vegetable oil in their mill, and cess was leviable on the crude vegetable oil as extracted from oilseeds. The tribunal clarified that while processed oil could not be levied with cess, the crude oil produced from oilseeds was subject to cess as per the provisions of the Vegetable Oils Cess Act, 1983. Hence, the appeal was dismissed in favor of the respondent-Collector.