1991 (4) TMI 255 - AT - Central Excise

Summary

Issues Involved
1. Interpretation of Notification 115/75-C.E., as amended by Notification 122/75.
2. Classification of oleoresins under the Central Excise Tariff.
3. Applicability of the doctrine of "ejusdem generis."
4. Definition and scope of "oil mill and solvent extraction industry."
5. Eligibility for exemption under Notification 115/75.

Issue-wise Detailed Analysis

1. Interpretation of Notification 115/75-C.E., as amended by Notification 122/75:
The central issue in all three appeals is the interpretation of Notification 115/75-C.E., dated 30-4-1975, as amended by Notification 122/75, dated 5-5-1975. The notification exempts goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944, manufactured in factories covered by specified industries, from the whole of the duty of excise leviable thereon. The Schedule includes industries like Coir Industry, Cashew Industry, Tanning Industry, Oil Mill and Solvent Extraction Industry, and Rice Milling Industry. The respondents claimed exemption under this notification for oleoresins manufactured using the solvent extraction method.

2. Classification of Oleoresins under the Central Excise Tariff:
The respondents manufacture oleoresins falling under Heading 1301.90, derived from items like chillies, ginger, cardamom, pepper, and turmeric using the solvent extraction method. The dispute arose when the respondents claimed a refund of duties paid on oleoresins under Notification 115/75, arguing that these products should be classified under the "Oil Mill and Solvent Extraction Industry" category. The Collector of Central Excise (Appeals) allowed their claim, but the department contested this decision, leading to the present appeals.

3. Applicability of the Doctrine of "Ejusdem Generis":
The appellants argued that the doctrine of "ejusdem generis" should be applied to interpret the notification. According to this doctrine, general words following specific words take the color of the specific words. Here, the term "solvent extraction" following "oil mill" should be restricted to solvent extraction connected with oil mills. The Tribunal agreed, stating that the generality of "solvent extraction" is limited by the specific term "oil mill," thus excluding oleoresins from the exemption.

4. Definition and Scope of "Oil Mill and Solvent Extraction Industry":
The Tribunal examined whether the term "oil mill and solvent extraction industry" in the notification could extend to industries not connected with oil milling. The respondents contended that solvent extraction is a separate industry, but the Tribunal found that the term "solvent extraction" in the context of the notification refers specifically to oil milling. The Tribunal cited publications and definitions to support that solvent extraction is a method used in oil milling and not an independent industry.

5. Eligibility for Exemption under Notification 115/75:
The Tribunal concluded that the exemption under Notification 115/75 is intended for the oil mill industry, including those using the solvent extraction method. However, this does not extend to oleoresins, which are not products of the oil mill industry. The Tribunal emphasized that the words "oil mill" as commonly understood refer to vegetable non-essential oils, and the inclusion of "solvent extraction" does not broaden the scope to cover oleoresins. Therefore, the respondents' claim for exemption was rejected.

Conclusion:
The Tribunal allowed all three appeals, ruling that oleoresins are not entitled to the benefit of exemption under Notification 115/75 as amended. The interpretation of the notification, supported by the doctrine of "ejusdem generis" and the context of the terms used, led to the conclusion that the exemption applies only to the oil mill industry, including those employing the solvent extraction method, but not to oleoresins.