1996 (8) TMI 185 - AT - Central Excise

Summary

Issues:
Whether rice bran oil is a vegetable oil for purposes of the Vegetable Oils Cess Act, 1983.

Detailed Analysis:
The appeal was filed against the order-in-appeal confirming the demand for cess on rice bran oil produced by the appellants. The appellants contested the demand before the Assistant Collector, who rejected their contentions. The Collector (Appeals) concurred with the findings, leading to the current appeal (para 2).

Appellants argued that rice bran oil is not a vegetable oil assessable to cess under the Act because it is not fit for human consumption, extracted by a solvent process, and used for industrial purposes. They also cited a previous High Court order excluding rice bran oil from the levy of cess under the Act. Additionally, they claimed the demand was time-barred (para 3).

The appellants referred to a High Court decision where it was held that rice bran oil is not subject to cess under the Act. However, the Departmental Representative (D.R.) argued that the Supreme Court did not exclude rice bran oil from the definition of oil, emphasizing that since rice bran is a plant-based material, it falls under the definition of vegetable oil for cess purposes (para 4).

The Tribunal examined the contentions and referred to the High Court judgment, which defined vegetable oil as oil produced from oilseeds or oil-bearing plant materials containing Glycerides. The Tribunal analyzed the common meaning of vegetable oil and concluded that rice bran does not fit within this definition. As rice bran is a by-product of rice and not a seed capable of germination, it cannot be considered oil-bearing plant material. Therefore, the Tribunal held that rice bran oil is not vegetable oil for the purposes of the Act (para 5).

Consequently, the Tribunal allowed the appeal, setting aside the impugned order as the Supreme Court's judgment did not address the assessability of rice bran oil under the Act (para 6-7).