9911796707
TMI Blog1989 (3) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... 6th June, 1981 held that the hydrogenated rice bran oil was classifiable under Tariff Item 68 of the Central Excise Tariff (hereinafter referred to as 'CET'), because hydrogenated rice bran oil is solid at the ordinary temperature and therefore should be considered as fat and not as oil. The Assistant Collector observed that there was one opinion that the said goods could not fall under Tariff Item 12 as it was unfit for human consumption. The Assistant Collector observed that the said goods was new product after manufacture, having a distinct name, character and use as such it fell under Tariff Item 68 CET. The respondent on the other hand maintained before the Assistant Collector that the said goods was semi-solid and still vegetable non-essential oil falling under Tariff Item 12 CET. 2. Being dissatisfied with the order dated 16th June, 1981, the respondent appealed before the Appellate Collector of Central Excise, Madras. By an order dated 30th November, 1981, the Appellate Collector held that hydrogenated rice bran oil is classifiable under Tariff Item 12 CET and therefore ordered for consequential relief to the respondent. 3. The order of the Appellate Collector holding tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enation of rice bran oil is a process. But all processes need not be manufacture. It must be such a process which transforms the old articles into goods and changes the identity, use and the purpose of use of the goods undergone by the process. By the process which can be considered to be manufacture a new identifiable goods, in the sense known in the market as such must come into being. But that is one part of the view. It appears, however, that the melting point of hydrogenated rice bran oil is 45oC and it is in the nature of extra hardened vegetable process which is unfit for human consumption. It was taken to be classifiable under Tariff Item 68 CET. 9. Similar are the facts in Civil Appeal No. 2479 of 1987 before us in the matter of Collector of Central Excise, Madras v. M/s. Tata Oil Mills Co. Ltd. There also, the CEGAT allowed the appeal of the respondents and held that the extra hardened rice bran oil continued to remain as oil classifiable under Item 12 CET. It is necessary to decide in both these matters the nature of the product. 10. Rice bran oil is extracted out of rice bran by solvent extraction method. After such extraction, rice bran oil obtained is in liquid form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In exercise of his power of revision under the then Section 35A of the Act, the Collector called upon the appellant to show cause as to why the hardened oil should not be subjected to two-stage duty. After hearing the appellants, the Collector passed the orders by which he confirmed the two-stage duty. Being aggrieved by the Collector's order, the appellants filed a revision application before the Central Government which, on transfer of the proceedings to the Tribunal, was transferred to the Tribunal. 12. The matter was heard by a three-member Special Bench. It was resolved that a larger bench should be constituted and a larger bench had been constituted. It was noted by the Bench that irrespective of the fact whether extra hardened rice bran oil produced by the parties was classified under Item 12 CET or Item 68 CET, it would remain fully exempt. One behalf of the parties, the respondents herein, it was argued before the Tribunal that hydrogenation or hardening was a process in the course of manufacture of a soap. The extra hardened oil came into existence during soap manufacture at an intermediary stage and such oil was not a new product by itself. Secondly, it was urged that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and the problem herein. 14. In this connection, reference may be made to the observations of this Court in Champaklal v. State of Gujarat [AIR 1980 SC 1889] though it was a criminal case, this Court observed therein that vanaspati was essentially an oil although it was a different kind of oil than that oil (be it rapeseed oil, cotton-seed oil, groundnut oil, soyabean oil or any other oil) which forms its basic ingredient. Oil would remain oil if it retained its essential properties and merely because it had been subjected to certain processes would not convert it into a different substance. In other words, although certain additions had been made to and operations carried out on oil, it would still be classified as oil unless its essential characteristics had undergone a change so that it would be misnomer to call it oil as understood in ordinary parlance. Such change was not supported by the evidence in that law. The Tribunal found so and it is a question of fact that the hydrogenated rice bran oil still remained oil. 15. On behalf of the interveners, it was further submitted before the Tribunal that Item 12 CET which dealt with vegetable non-essential oils, all sorts, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain whether Item 12 is applicable for levy of excise duty in respect of hardened vegetable oil. Tariff Item No. 12 brings in its sweep "vegetable non-essential oils of all sorts" and the expression "all sorts" would bring in its ambit hydrogenated oil. There is hardly any distinction between vegetable oil in liquid form and the hydrogenated oil which is hardened with a melting point higher than 41oC. Apart from the distinction in the physical appearance, there is no distinction between oil and hydrogenated oil which is well supported by the decision of this Court in Tungbhadra's case (supra) where this Court held that several oils are viscous fluids but those do harden and assume semi-solid condition on the lowering of the temperature. Therefore, it is obvious that hydrogenated oil is nothing but hardened Vegetable oil which would fall within Item 12 CET for the purpose of Central Excise duty. 19. Our attention was drawn to Encyclopaedia Britannica, 1968 Vol. 19 p. 302 where preparation of rice is indicated. It states as follows :- "The Kernal of rice as it leaves the thresher is enclosed by the hull, or husk and is known as paddy or rough rice. Rough rice is used for seed and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
