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TMI Blog2015 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... it that constitutes the definitive index of the legislative intention when the Statute was enacted. Therefore, the test is how the product is identified by the class or section of people dealing with or using the product. Rice Bran Oil which is fit for human consumption can only be a different and distinct commodity from the other two commodities viz., RB Fatty Acid and RB Acid Oil as the former is fit for human consumption while the latter two commodities are only used in the process of manufacture of soaps/cattle feed. It is pertinent to note that RB fatty acid and RB acid oil and Rice Bran oil are considered as distinct and different commodities for the purpose of levy and collection of excise duty. - As a sequel we find that the order of the respondent, which is impugned, is in accordance with the law and does not brook interference - Decided against assessee. - Special Appeal No.1 of 2004 - - - Dated:- 12-3-2015 - Honble Sri Justice K. C. Bhanu And Sri Justice M. Seetharama Murti,JJ. For the Appellant : Sri S. Krishna Murthy For the Respondent : None appeared JUDGMENT (Per Honble Sri Justice M. Seetharama Murti) This special appeal by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ADC (CT), Kakinada had found that the said orders are not correct and are prejudicial to the interests of the revenue of the State and had, therefore, entertained a suo motu revision by exercising the revisional jurisdiction vested in him under Section 9(2) of the CST Act read with Section 20(1) of the APGST Act and had proposed to set aside the orders of the ADC (CT), Kakinada and also the consequential final orders of the CTO, Peddapuram. Accordingly, the Commissioner had issued a show cause notice. Finally, on merits, the Commissioner had held that RB fatty acid and RB Acid oil are different and distinct from rice bran oil/refined oil and had, therefore, set aside the orders of the ADC (CT) and the consequential orders of the CTO to the extent of the relevant disputed turnovers. Thus, the Commissioner by the orders impugned had revised the rate of tax from 1% to 4% on the interstate sales turnovers of the following goods. Turnover Rate of tax 1. Sales of R.B.Fatty Acid (covered by C forms) Rs.1,46,47,870/- 4% 2. Sales of R.B. Acid Oil (covered by C Forms) Rs.13,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the APGST Act only with effect from 01.11.2000 and not before. The subject assessment year relates to the period prior to the said amendment. The Commissioner, Commercial Taxes in his impugned orders had erroneously relied upon the decisions which are inapplicable to the facts of the case of the appellant. 3. (b) In support of his contentions, the learned counsel for the appellant had placed reliance on the following decisions. 1. Collector of C.Ex v. Jayant Oil Mills Pvt. Ltd., 1989(4) E.L.T. 287 (SC) 2. Tungabhadra Industries Ltd., Kurnool v. Commercial Tax Officer, Kurnool 1960 (Vol.XI) STC page 827 3. The State of A.P. v. M/s.Coromandel Agro Products and Oils Ltd., 1988 (Vol.7) APSTJ page 4 4. State of Andhra Pradesh v. Modern Proteins Ltd., (and another appeal) 1994 (Vol.95) STC page 181 4. On the other hand, the learned Special Standing Counsel would contend as follows: - Rice Bran Oil is altogether different from RB fatty acid and RB acid oil. They differ not only in character and nature but also in common parlance understanding. They are also different in economical perspective. The relevant entries in the statute need no interpretation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from 01.01.2000. However, TOT was exempted by G.O.Ms.No.911. Rev. dated 31.12.1999 with effect from 01.01.2000. Reverting to the facts of the present case, 1998-99 is the year of assessment in the case on hand. There is no entry in the said schedule dealing separately with acid oil and fatty acid by that year. Since entry 24-F was introduced by GOMs.No.751 Rev. dated 23.10.2000 with effect from 01.11.2000 it is contended on behalf of the appellant/dealer that it is clear that RB fatty acid and RB acid oil are considered as distinct and different commodities for the purpose of levy and collection of tax under the APGST Act only with effect from 01.11.2000 and not before and that since the subject assessment year relates to the period prior to the said amendment, the ADCs Order is unassailable. The said contention based on the amendment to the entries of Schedule I cannot be countenanced. Amendment to entries may be made by the legislature in its wisdom for various reasons. An amendment may be made and a commodity like one of the many vegetable oils may be specially brought under a separate entry by such amendment if the legislature intends to subject that commodity to a diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice requiring to show as to why the order of the Appellate Collector should not be set aside and that of the Assistant Collector be restored. The matter came up before CEGAT. The CEGAT in its impugned order noted that the appeal was concluded by the judgment of the five member Bench of the Tribunal in the case of M/s.Tata Oil Mills Co. Ltd.,[1986 (24) ELT 290] and held that the order dated 30.11.1981 of the Appellate Collector was correct and dismissed the appeal of the appellant. Therefore, the appellant i.e., the Collector of Central Excise under Section 35L of the Central Excises and Salt Act, 1944 had preferred an appeal from the orders of the Customs, Excise and Gold (Control) Appellate Tribunal. In the above stated factual background, the Supreme Court held as follows: We are of the opinion that the Tribunal particularly emphasized that the hardened technical oil is the same thing as the oil from which it is made. It is clearly akin to the oil in homologue, a product of scientific modification but unaltered in its essential character. Therefore, in our opinion, the Tribunal was right in the conclusion it arrived at. The ratio in the decision is to the following effect. Edi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. M/s.Coromandel Agro products and oils Ltd.,( 3 cited) the question that arose for consideration was whether Sledge Oil and Cotton seed acid oil are vegetable oils falling under entry 128 of the First schedule to attract lower rate of tax u/s.8(2-A) of the C.S.T.Act.? The Tribunal held that the said oils are liable to tax under entry 128 at reduced rate. The department contended that such oils are general goods and are liable to tax at higher rates under the CST Act. This Court while dealing with entry 128 held that the said entry relates to vegetable oils and that the various oils mentioned therein are only illustrative and that the entry specifically says vegetable oils including those mentioned therein and that in the circumstances there is no warrant for placing the construction that the said entry relates only to those vegetable oils which are edible. Further, having regard to the wide language used, it was held that it is not possible to restrict it only to edible vegetable oils. This Court had also noted that groundnut oil which is also edible oil is shown as a separate entry no.24 and therefore, negatived the contention that entry 128 relates to edible oils. In State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that it contains all edible things. Margarine is used exclusively as a raw material for preparing bakery products and is also used in confectionary industry. Like butter, margarine also contains almost 80% fat and remaining constituents of margarine are edible things which are added thereto by the manufactures of margarine. Vegetable and hydrogenated oils are used in manufacturing margarine and as it is used for making eatables, margarine is also edible though it is not used for normal cooking as other oils like coconut, sunflower, soyabean, sesame oils are used but it cannot be disputed that it is an edible oil. The Supreme Court further held as follows: In the aforestated circumstances, one has to consider whether margarine can be considered as an edible oil. We clearly understand that edible oil is that oil which can be used for human consumption. It is not necessary that all edible things should be consumed in the form in which they are available. There are number of ingredients used in cooking for preparation of food articles which we do not consume in the same form but they are used in preparation of food articles which are consumed. So as to simplify the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oil is subjected to a process of refining, two distinct and different commodities namely RB Fatty Acid and RB Acid Oil had also emerged. Therefore, the manufacturing process had altered the identity of one commercial commodity and new commercial commodities had emerged. The law of sales tax is also concerned with goods of various descriptions. It cannot be disputed that the two commodities namely RB Fatty Acid and RB Acid Oil, which are of commercially different category and description, had emerged during the process of manufacture of Rice Bran Oil. The principle which is fairly well settled is that the words or expressions under the statute must be construed in the sense in which they are understood in the trade, by the dealer and the consumer because it is they who are concerned with it and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the Statute was enacted. Therefore, the test is how the product is identified by the class or section of people dealing with or using the product. That is the test which is attracted whenever the Statute does not contain any definition. It is generally, by its functional charact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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