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TMI Blog2004 (11) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... th September, 1984, the Superintendent of Central Excise returned the Classification List and called upon the Appellants to clear the goods on payment of excise duty at the rate of Rs. 100/- per metric ton and special excise duty at 5% of the basic excise duty. The Appellants filed Civil Writ Petition No. 3215 of 1984 in the Rajasthan High Court contending that since there was no manufacture, excise duty was not payable. On 23rd October, 1984, the Rajasthan High Court passed an interim order permitting the Appellants to clear the refined oil from its factory subject to the Appellants furnishing a solvent security at the rate of Rs.105 per metric ton. This Interim order was confirmed on 5th February, 1987. 3.Pursuant to the interim order, for the period prior to March, 1986, the Appellants cleared their goods on furnishing security. For the period after March, 1986, the Appellants were issued show cause notices. The Appellants filed reply to the show cause notices. By an Order dated 1st January, 1988 the Assistant Collector held that the refined oil cleared by the Appellants was classifiable under Tariff Item 1503.10 and duty of Rs. 40,47,586.25 was payable by the Appellants. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 1503.10 - Which have undergone, subsequent to their extraction, any one or more of the following processes, namely :- Rs. 5,000 per tonne or acid Treatment with an alkali (1) Bleaching (2) Deodorisation (3) 1503.90 - Other NIL" 12. Thus, it is to be seen that Tariff Item 15.03 is in respect of "Fixed vegetable oils other than those under the heading No.15.02". Tariff Item 15.03 is sub-divided into two categories. Tariff Item 1503.10 covers fixed vegetable oils, which have undergone, subsequent to the extraction, any one or more of the following processes, namely, (1) Treatment with an alkali or acid; (2) Bleaching; and (3) Deodorisation. All other fixed vegetable oils fall under Tariff Item 1503.90. It is fairly not disputed that the Appellants undertake process mentioned in Tariff Item 1503.10. The question still remains whether by undergoing such a process there is manufacture. 13. Prior to 1986, Section 2(f) of the Central Excises and Salt Act, 1944 defined "manufacture" as follows : "Manufacture" includes any process incidental or ancillary to the completion of a manufactured product; and (i) in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e production or manufacture of excisable goods but also any person who engages in their production or manufacture on his own account." 14. Thus, under this definition, apart from actual manufacture certain processes were considered to be manufacture. This did not include the process of refining edible oil. 15. With effect from 28th February, 1986 the definition of the term "manufacture" has been changed. Now under Section 2(f) "Manufacture" has been defined as follows : "2(f) "manufacture" includes any process, - (i) incidental or ancillary to the completion of a manufactured product; and (ii) which is specified in relation to any goods in the Section or Chapter notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture; and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account." 16. Thus, the amended definition enlarges the scope of manufacture by roping in processes which may or may not strictly amount to manufacture provided those processes are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e into existence. In the case of Commissioner of C. Ex., Chandigarh-I v. Markfed Vanaspati & Allied Indus. reported in [2003 (153) E.L.T. 491 (S.C.)], the question was whether there was any manufacture when earth was processed and spent earth derived therefrom. This Court held that the burden to prove of manufacture is always on Revenue. It was held that merely because an Item falls in a Tariff Entry, it could not be presumed or deemed that there was manufacture. It was held that to begin with the product was earth and that even after processing it remained earth. It was held that the duty having been paid on earth, no duty was leviable on spent earth. 20. In the case of Collector of Central Excise v. Technoweld Industries, reported in [2003 (155) E.L.T. 209 (S.C.)], the question was whether the drawing of wires from wire rods amounted to manufacture. It was held that both the products were wires and merely because they were covered by two separate Entries did not mean that the product was excisable. It was held that in the absence of any manufacture the product did not become excisable merely because there were two separate Entries. 21. In the case of Metlex (I) Pvt. Ltd. v. Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this case, neither in the Section Note nor in the Chapter Note nor in the Tariff Item do we find any indication that the process indicated is to amount to manufacture. To start with the product was edible vegetable oil. Even after the refining, it remains edible vegetable oil. As actual manufacture has not taken place, the deeming provision cannot, be brought into play in the absence of it being specifically stated that the process amounts to manufacture.
25. In any event, for the period prior to 1986 i.e. before the definition of the term "Manufacture" was amended, this process could not be taken to amount to manufacture. Thus for the period prior to 1986 the demand could not have been sustained in any event.
26. In this view of the matter, we are unable to sustain the Orders of the authorities below. It is accordingly held that there is no manufacture and the refined oil is not excisable. The Orders of the authorities below holding that there is manufacture and refined oil is excisable are hereby set aside. The demand notices issued are quashed.
27. Accordingly, the Appeals are allowed. There will, however, be no order as to costs.
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