1995 (9) TMI 127 - AT - Indian Laws

Summary

Issues:
1. Appeal against demand of Cess on cotton seed oil under the Vegetable Oil Cess Act, 1983.
2. Estoppel based on Finance Minister's assurance regarding Cess on certain Vegetable Oils.
3. Interpretation of Section 3(h) of the National Oil Seeds and Vegetable Oil Development Board Act, 1983 regarding Cess on oil extracted from 'oil-cakes'.

Analysis:
1. The appeal was filed against the demand of Rs. 1,16,321.50 as Cess on 23,264.30 quintals of Cotton seed oil extracted by the appellants during a specific period. The Collector Central Excise (Appeals), Madras confirmed the demand, leading to the appeal before the Tribunal.

2. The appellants argued that the Finance Minister's Budget Speech promised the withdrawal of Cess on certain oils, including cotton seed oil. They contended that this assurance should estop the Department from recovering Cess. However, the Tribunal agreed with the Collector that there cannot be promissory estoppel against the express provisions of the law.

3. The appellants further argued that Cess was not applicable to oil extracted from 'oil-cakes' as it was not of plant origin as per Section 3(h) of the National Oil Seeds and Vegetable Oil Development Board Act, 1983. The Respondent contended that there was no evidence to prove the oil was extracted from 'oil-cakes' and proposed a remand for verification.

4. The Tribunal examined the records and submissions. Regarding the estoppel argument, it upheld the Collector's finding that the Finance Minister's assurance did not prevent the recovery of Cess. Additionally, the Tribunal analyzed the definition of 'oil cake' and concluded that it is a residue of oil seeds, maintaining its plant origin even after extraction, thus making Cess applicable as per the relevant Acts.

5. Referring to a relevant case, the Tribunal highlighted the interpretation of 'oil-bearing material of plant origin' in a similar context. The case discussed the production of rice bran oil from rice bran and concluded that the origin of the material determines its classification for Cess purposes.

6. Ultimately, the Tribunal rejected the appeal, affirming that Cess on the cotton seed oil extracted by the appellants was valid under the provisions of the Vegetable Oil Cess Act, 1983 and the National Oil Seeds and Vegetable Oil Development Board Act, 1983.