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TMI Blog2010 (10) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;DORB'). The assessee sells the DORB to persons owning poultry farms and dairy farms for use as poultry feed and cattle feed and to manufacturers of poultry feed and cattle feed for use as a feed supplement to enrich the protein content in the animal feeds. Tax invoices are raised mentioning that DORB is to be used as animal feeds/poultry feeds. Consignees/purchasers as per the tax invoices and as per the names in which individual accounts are maintained in the ledger are all owners of poultry farms/dairy farms or manufacturers of poultry feed and cattle feed. 2. The goods which are generally exempt from tax are specified in the First Schedule and goods taxable at 4% are specified in Third Schedule to the Act. Third Schedule as it existed during the period of 1-4-2006 to 31-3-2007 specified 'Husk and bran of cereals and pulses' at Sl. No. 45 as goods liable to tax at 4%. First Schedule to the Act as it existed during the same period specified animal feed and feed supplements etc. at Sl. No. 5 as goods exempt from tax. Therefore, it was not totally free from doubt whether de-oiled rice bran sold as poultry feed and cattle feed would fall under Sl. No. 5 of the Firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Counsel for the assessee assailing the impugned order contended that rice bran cake is utilised as cattle feed and it is also utilised by manufacturers of cattle feed. Therefore, it is not only an animal feed it is also a feed supplement. Therefore, the order passed by the Commissioner of Commercial Taxes is erroneous and contrary to the material on record and also the settled legal position as held by various Courts in the country as well as the Apex Court. Therefore, he submits that the impugned order is to be set aside and the order passed by the Advance Ruling Authority is to be restored. Per contra, the learned Counsel for the Revenue submitted that as is clear from the impugned order the assessee is selling the goods as DORB and the assessee is not a cattle feed or poultry fed manufacturing unit. Therefore, the commodity sold by it cannot assume the characteristic of poultry or cattle feed in the common parlance. The DORB even after extraction of oil continues to be a rice bran only and therefore it falls within Third Schedule under the item 'Husk and bran of cereals and pulses' and therefore the order passed by the Commissioner is legal and valid and do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, but in its entirety and as a whole taken together with even vitamins and calcium mix. 9. This Court in the case of Oil Seeds, Oil Trade and Industry's Association in Karnataka (Registered), Bangalore and Another v. State of Karnataka and Others 1998 (45) Kar. L.J. 158 (HC) : (1998) 111 STC 234 (Kar.), explained the meaning of the word as found in Survey of India's Export Potential of Oil Cakes, Volume IV, Page 1, where it is stated as under: De-oiled rice bran: Rice bran is a bye-product of rice (paddy) and is the basic raw material for rice bran oil. During the process of rice milling, the layer around the endosperm is removed together with a portion of the polishing. This separated layer is called rice bran. The quantity of rice bran obtained is variable as it depends upon the degree of polishing. Bran constitutes roughly 6 to 10 per cent of paddy rice. Bran is normally used as cattle feed. These details furnish the constituents of the rice bran. Then after de-oiling process, it is noticed as hereunder: The de-oiled rice bran is mainly used as an ingredient for mixed feed for poultry and pigs in more advanced countries like the U.K., Japan and the U.S.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il cakes - whereas oil cakes are used as protein supplement in livestock foodstuffs and mixed with the animal feed, oil cakes by themselves cannot be termed to be an animal feed, since animal feed not only consists of its ingredients but the total bulk in form, shape and size which would feed an animal. Animal feed thus cannot be an ingredient or a part of the feed, but in its entirety and as a whole taken together with even vitamins and 'calcium mix'. Para 6: The whole substance thus is the mix and not any specific item as such. In the same manner products which supplement animal feed and which are generally added to animal feed are also covered by the generic term 'animal feed'. 11. It is in this context of the statutory provisions and the law declared we have to see what is the nature of business. As is clear from the application for registration under the Act, it is specifically stated at column (32), the first ledger 'commodity that it is dealing in edible and non-edible oil at column (34) he has clearly mentioned that the major commodity traded or manufactured is 'de-oiled rice bran/cakes'. 12. Therefore, it is clear from the application f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. It is settled law that if the Court finds that any of the taxing provision is ambiguous, then the Court has to adopt that interpretation which favours the assessee. In that view of the matter when the Commissioner has granted exemption for sale of animal feeds and feed supplement and when the assessee is manufacturing the feed supplement and selling it as feed supplement, he is entitled for the benefit of the said exemption as the assessee is not a dealer in husk and bran. After the process is undertaken by the assessee in respect of husk and bran, it is converted into cake and oil is extracted, and cake is sold. It does not continue to be husk and bran as contemplated in Third Schedule, Item 45. 16. The Commissioner disagreed with the finding of the Advance Ruling Authority on the ground that the applicant is not a cattle feed or poultry feed manufacturing unit and the commodity sold by it cannot assume the characteristic of poultry or cattle feed in the common parlance. No where it is stated that the dealer should be manufacturing cattle or poultry feed to be eligible for the benefit under First Schedule. Any dealer who is having a manufacturing unit and manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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