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TMI Blog1996 (1) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... edabad. 3. The appellants are engaged in the manufacture of Vanaspati (in short referred to as V.P.). They manufacture V.P. where in certain specified minor Oils [Vide Notf. 45/89-(N.T.) C.E., dated 11-10-1989] were used, in respect of which they claimed Money Credit as per the provisions of the above notification read with the provisions of Rule 57-K of the C.Ex. Rules, 1944. There is no dispute before us on the rate of Money Credit or on the eligibility of any of these Oils for money credit. The only dispute before us is whether Money Credit can be taken in respect of the quantity of raw oil taken, which, after undergoing certain processes like refining, degumming, bleaching, filtering etc. (in which process about 10-15% of raw oil is lost) is subsequently subject to hydrogenation as contended by the appellants or only on the quantity of processed minor oil, which is actually subject to hydrogenation. The Department objected to the taking of money credit on the entire quantity of raw oil, by holding the view that the Notification allows money credit only on the quantity of oil subjected to the process of hydrogenation and the notification does not contemplate taking of cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would therefore, plead that the Department, after giving an affidavit before the Supreme Court in the above manner, are estopped from contending otherwise, before the Tribunal. (iv) He also points out that in the case of Sesame Oil, (Til Oil), it can be added only after hydrogenation for meeting the requirements of Vegetable Oil Products Control Order, 1947. Hence, it cannot be the intention of the legislature that by specifying Sesame Oil in the table, only that quantity of oil actually subject to hydrogenation is to be given credit. The provisions of Notfn. issued under Rule 57K are to be read in the context of the requirements under Vegetable Oil Control Order. Since the credit scheme is extended only in respect of oils hardened rendering fit for human consumption, the requirement specified for such V.P. fit for human consumption as laid down under the Vegetable Oil Products Control Order cannot be ignored and the Money Credit Scheme considered in isolation. It is specified [Vide Para No. 2(1)(L)] under the heading requirements in the First Schedule to be Vegetable Oil Control Order, 1975 as below : "The said oils shall be neutralised with alkali and bleached with bleach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educted from the quantity of V.P. for adjusting money credit towards duty payable on V P. (Vide Bombay Collectorate Trade Notice No. 47/89, dated 5-5-1989). (iii) From the above, it cannot be said that whatever is prescribed in the V.O.P. Control Order would be ipso facto applied for extending money credit. Money Credit is not like Modvat Credit. Modvat Credit is intended to avert the cascading effect of the duty paid on inputs. Money Credit is given as an incentive for encouraging use of certain inputs in the final product. Such inputs may or may not be dutiable. It is in the nature of advancing some monetary subsidy to facilitate payment of duty on the final product, where certain specified inputs are used. Hence, the Govt. can prescribe the date on which money credit is to be given. It can also prescribe the quantity for which subsidy is to be given. The Notification clearly stipulates that "Credit shall be taken only in respect of the quantity of oil or fat, as the case may be, subjected to hydrogenation for the manufacture of the said final products and the credit may be taken only on the date on which the said oil or fat, as the case may be, has been so hydrogenated. (e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government gives a subsidy in the form of money credit, where benefit of ambiguity (if any) has to be given to the State and not to the claimant for subsidy. (vi) Referring to the affidavit of the Under Secretary, he would plead that it is an uncalled for statement on a non-issue. This should not be construed as a promise made before the Supreme Court or an affirmation of the legal position on the issue that was being considered by Supreme Court. The very same S.C.Ns., which were dropped by the Asstt. Collector, were challenged by way of appeals, even before the affidavit was filed by the Under Secretary. They have now come before the Tribunal. In the circumstances, plea of estoppel or having made any concession before the Supreme Court on the issue under consideration by Apex Court, cannot be accepted. This, inadvertence has crept in only due to communication gap between the Collectorate and the Ministry. 6.1 After hearing the rival contentions ably presented by both the sides, it would be necessary to set out the relevant portion of Notfn. 45/89, dated 20-3-1990 for appreciating the arguments from both the sides. "In exercise of the powers conferred by Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Supreme Court in Liberty Oil Mills case would be more applicable in such a situation. 6.4 Bombay Collectorate Trade Notice referred to by Shri Mondal, the Ld. SDR, does not allow money credit on the quantity of Til oil merely added to V.P. to prevent adulteration. It is not subject to hydrogenation. It is added after hydrogenation. While the position may be acceptable to us, we may not be able to agree that minor oils hardened for human consumption by any other process other than hydrogenation could be denied money credit, by citing condition (i) of Notification; Because explanation to the Notification clearly indicates that V.P. can be obtained by hydrogenation or by any other process. On account of this position, there could be a case for providing a suitable criterion in such cases, where V.P. is obtained by process other than hydrogenation. That cannot lead us to a conclusion that money credit is not available in the case of minor oils hardened by any other process nor can it lead us to believe that because of absence of such a condition to cover V.P. obtained from minor oils through other process, there is a case for giving credit on the raw oil drawn for processi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng out that the affidavit filed by the Under Secretary to plead that the Department is estopped from contesting this appeal. 6.7 The affidavit from the Under Secretary cited by the ld counsel, no doubt, indicates that the Assistant Collector's action dropping the show cause notice (on the issue now before us), is correct in the context of Notification No. 45/89. All the same, these orders have not been accepted by the Collector and they have been challenged by way of appeals before the Collector (Appeals), who has allowed the Department's appeals and confirmed the demands. These are now challenged by way of appeals before us. It is also revealed, during the hearing, that the appeals have already been filed, even before the affidavit was filed by the Under Secretary. In the circumstances, it is quite plausible that there might have been a communication gap between the Collector and the Ministry. Be that as it may, we find that the issue before the Supreme Court is the relevant date for taking money credit and not the quantity of oil eligible for money credit. Hence, it cannot be said that a concession has been made before the Supreme Court on the issue now before us, which can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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