1996 (11) TMI 171 - AT - Central Excise

Summary

Issues: Classification of industrial oils under Tariff Item 12, applicability of Notification No. 115/75 for exemption

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the issue involved two appeals filed by the Collector against orders-in-appeal passed by Collector (Appeals), Ahmedabad. The common issue in both cases was the classification of industrial oils, specifically hardened rice bran oil and inedible groundnut oil, under Tariff Item 12. The Department contended that Notification No. 115/75 allowed exemption only for T.I. 68 goods, not T.I. 12 goods. The Tribunal referred to a previous case involving Tata Oil Mills Co. Ltd., where it was established that industrial oils, even after hardening, remain classifiable under Item 12. The Department argued that the Collector (Appeals) did not address the applicability of the notification, necessitating a remand for further findings.

The Tribunal noted that the Larger Bench's observations in the Tata Oil Mills case did not conclusively determine the classification issue. It was emphasized that the Supreme Court had ruled that inedible vegetable/industrial oils are classified under Item 12 post-hardening, making the notification's applicability crucial. Despite the Collector's failure to explicitly address the notification, the legal position indicated that once classified under Item 12, the exemption under Notification No. 115/75 was not applicable. The Tribunal clarified that while the products were classified under Tariff Item 12, they were not entitled to the notification's benefit. Consequently, the appeals were disposed of based on this classification and exemption analysis.