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TMI Blog1994 (1) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ed oil is first obtained by crushing cotton seeds in a expeller and the oil containing `bagra' is collected in a tank. Addition of caustic soda results in the settling down of `bagra' which is used in soap stock and cotton seed oil free from `bagra' is separated. In regard to castor oil as well, the appellants stated that castor oil seeds are crushed in the expeller and the oil containing `bagra' is collected in a vessel through which steam is passed in order to separate bagra. They contended that no Cess was leviable on the oils produced by the appellants in terms of the latter part of the definition of the term `Vegetable oil' in clause (h) of Section 3 of the National Oil-Seeds and Vegetable Oil Development Board Act, 1983 since after emerging from the expeller it was being subjected to further process of refining. However, the Collector held that Cess was leviable on the oils in question since the activities undertaken by the mills were only incidental or ancillary to the completion of the product in order to make it marketable. The Collector further held that Cess was also leviable on the stock of oil which had already been produced prior to 1-1-1994. 2.1 On behalf of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in the case of Ganesh Extrusion Artistry v. CCE reported in 1993 (66) E.L.T. 639 (Tribunal) = 1992 (40) ECR 346. 2.2 On behalf of the other appellants learned advocate Shri V.K. Bhatt reiterated the submissions made by Shri Ahmedi. 3. On behalf of the respondent the learned JDR Shri L.N. Murthy submitted that removal of parts of oil seeds which are present in the oil extracted by crushing in expeller, either by treatment with caustic soda or passing steam through the storage tank in which oil is collected, is a part of the process of recovery or production of oil and cannot be deemed as processing of the oil subsequent to its recovery. He referred to the decision of the Supreme Court in the case of UOI v. D.C.M. reported in 1977 (1) E.L.T. (J 199) and contended that processing of vegetable oil subsequent to its recovery implies refinement in order to make it fit for human consumption by bleaching and deodorising. He added that there was also no infirmity in the Collector's finding that the `Vegetable Oil' lying in the appellants' mill on the midnight of 31-12-1983/1-1-1984 was chargeable to Cess. In this regard he placed reliance on the following case law :- (i) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re treated with steam. For examining the question whether the processes carried out by the appellants after crushing of both varieties of oil seeds in expeller was merely incidental or ancillary to the completion of production of crude or unrefined vegetable oil, we consider it desirable to refer to the paras 9 to 12 of the Supreme Court's judgment in the case of UOI v. D.C.M. reported in 1977 (1) E.L.T. (J 199), which are reproduced below :- x x x x x It follows from the extracts reproduced above that vegetable oil not subjected to the process of refinement by neutralisation with alkali bleached with fuller earth and/or activated carbon and deodorisation with steam or other chemical agents is categorised as crude or unrefined. Evidently in the appellants' case, the disputed vegetable oils not having been subjected to these processes continued to be in crude state. For these reasons we do not find any force at all in the appellants' contention that the disputed vegetable oils were subjected to processing or refinement subsequent to their recovery. 6. It is seen that our finding that Cess under the Vegetable Oils Cess Act, 1983 was payable on crude vegetable oil not subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e after they had become dutiable by the Finance Bill, 1977-78. The Court referred to the Karnataka High Court decision in the case of Karnataka Cement Pipe Factory v. Supdt. of Central Excise reported in 1986 (23) E.L.T. 313 that "Excisable goods" do not become non-excisable merely by reason of the exemption given under a notification and held that even though the taxable event is the manufacture or production of an excisable article, the duty can be levied and collected at a later date for administrative convenience. The Vegetable Oil Cess Act, 1983 was brought into force with effect from the midnight of 31-12-1983/1-1-1984 hence prior to the coming in force of the Vegetable Oil Cess Act, 1983, Vegetable Oil was not chargeable to Cess not by virtue of any exemption granted under a notification but on account of the fact that no cess had been imposed on such oil. We are, therefore, of the view that the ratio of the judgment in the case of Wallace Flour Mills Company Ltd. v. CCE is not applicable in this case. Under these circumstances on the ratio of the Tribunal's decision in the case of Vazir Sultan Tobacco Co. v. CCE reported in 1985 (21) E.L.T. 757 (T) we hold that no Cess was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured but not removed was also considered and after considering so it held as follows :- "9. What would be the effect of impost of additional excise duty on the goods already manufactured but not removed was a question before the Division Bench of this Court dealing with Special Civil Application No. 2887 of 1980 decided on 29th April, 1991. In that case, the question was required to be examined in the light of the Ordinance and the AD Excise Act involved in this petition. It has been held therein that the rate of duty prevalent on the date of removal would govern the situation and not that on the date of manufacture. That conclusion is reached by the Division Bench of this Court in its aforesaid ruling after examining the case law on the point including the aforesaid ruling of the Supreme Court in the case of Wallace Flour Mills Company Ltd. (supra). We are in respectful agreement with the reasoning given therein and the conclusion reached on the basis thereof. It is in consonance with the principle of law enunciated by the Supreme Court in its aforesaid ruling in the case of Wallace Flour Mills Company Ltd. (supra). We are inclined to follow the aforesaid Division Bench ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in paragraph 8). Against this order of the Tribunal, the appellants, Wallace Flour Mills Co. Ltd. filed their appeal before the Apex Court which was ultimately dismissed by the Court affirming the view taken by this Tribunal, as aforesaid. 4-6-1993 Sd/- (G.P. Agarwal) Member (J) 15. Since there is a difference of opinion between us, regarding the levy of cess on the vegetable oil which was in stock in the appellants' mill on the midnight of 31-12-1983/1-1-1984, the matter requires to be referred to the Hon'ble President in terms of Section 35D of the Central Excises and Salt Act, 1944 read with sub-section (5) of Section 129-C of the Customs Act - "Whether Cess was leviable in terms of the Vegetable Oil Cess Act, 1985 on the vegetable oil which was in stock in the appellants' mill on the midnight of 31-12-1983/1-1-1984". 4-6-1993 Sd/- G.P. Agarwal) Member (J) Sd/- P.K. Kapoor) Member (T) 16. [Order per : S.K. Bhatnagar, Vice President, agreeing with P.K. Kapoor, Member (T)]. - This matter has been referred to me by the Hon'ble President in view of the difference of opinion between hon'ble Member (Judicial) and Member (Technical) on the following point ..... X X X X Extracts X X X X X X X X Extracts X X X X
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