9911796707
TMI Blog2000 (8) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... d the aforesaid by-products namely soap stock, spent earth and soya sludge under Chapter sub-heading 1507.00 and soya lecithin under Chapter sub-heading 2923.00 and claimed exemption under Notification No. 115/75-C.E., dated 30-4-1975 as amended. The classification lists were approved by the proper officer and the appellants availed full exemption of the said goods from duty. 3.Appellants received two show cause notices dated 3-2-1997 and 6-5-1997 by which the Department proposed to recover the amounts of Rs. 48,186.00 and Rs. 15,776.00 towards duty on the above products cleared by them during the periods July to December 1996 and January to April 1997 respectively. Department wanted to deny the benefit of exemption under Notification No. 115/75-C.E. ibid on the ground that the appellants were not an "oil mill and solvent extraction industry" inasmuch as they were not producing oil either by crushing oil seeds or by solvent extraction process in their factory. In their response to the show-cause notices the appellants contested the Department's view by contending as follows : The activities of oil industries is not only restricted to the manufacture of oil by crushing seed. It al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ambit of the expression "oil mill" to attract the benefit of exemption under the Notification in respect of the products in question. They would rather like to have their activity called "oil mill industry". According to the view taken by the lower authorities, "oil mill" is an industry engaged in the extraction of oil from oil seeds only and does not include the whole oil industry. They have drawn support from the Supreme Court's decision in TOMCO Ltd. v. CCE, 1989 (43) E.L.T. 183 (S.C.) to hold that the expression "oil mill" when understood in its ordinary and natural sense has been used in the Notification to provide exemption to an industry engaged in milling of oil seeds only. The authorities have denied the benefit of the Notification to the appellants after finding that the latter are neither an "oil mill" nor a "solvent extraction industry" and hence not covered by item 4 in the Schedule to the Notification. 9.Ld. Counsel for the appellants submits that a factory where oil is processed in whatever manner is an oil mill and therefore the appellants' factory, where refining of solvent-extracted vegetable oils is carried out, is an "oil mill". He has, further, argued tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rming a specified operation on a material in the process of manufacture; also a building fitted with such machinery; a building etc., where specified industrial or manufacturing process is carried out. (ii) An apparatus or a machine for grinding or reducing a solid substance to powder, shreds, pulp etc.; also a building fitted with machinery for this purpose. (iii) A machine which performs its work by rotary motion. (iv) An apparatus for juicing or expressing the liquid from fruits, vegetables, plants etc. by grinding or crushing. 12.We are of the view that an oil mill is a building in which, or a machine with which, vegetable oil seeds are crushed to obtain the oil, and therefore, the expression "oil mill" should mean the mechanical process of extracting vegetable oil by crushing the oil seeds in a machine. "Oil mill" is a factory in which oil milling is carried out. In the appellants' case, this process was absent. What they did was refining of solvent-extracted vegetable oils, which cannot be included within the ambit of "oil milling" in the above sense. Admittedly, the appellants have not employed any solvent extraction technique in their factory and therefore their activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y undertakes such downstream processes. If in the premises of the same factory oil is extracted and refined and the refined oil is hydrogenated, it would be unreasonable to seek to divide a portion of the factory into one which forms part of the solvent extracting industry and another which does not. Such a factory would very much be within the oil mill or solvent extraction industry as the case may be and the benefit of the notification available. (emphasis supplied). 14.In the instant case, the appellants' activity was refining of solvent-extracted vegetable oils. This process is a process downstream to the extraction of the vegetable oil. But such extraction of the vegetable oil was not undertaken by the appellants in their factory. It follows that the appellants were engaged only in a downstream process. In this context, the observation of the Tribunal in the case of Godrej Foods Ltd. (supra), emphasised in the above para, assumes significance. It is not difficult to understand the view of the Bench as expressed in the observation. According to that view, a factory that does not undertake extraction of oil and its refining but undertakes only a process downstream thereto might ..... X X X X Extracts X X X X X X X X Extracts X X X X
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