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TMI Blog2011 (3) TMI 1449X X X X Extracts X X X X X X X X Extracts X X X X ..... lassifiable under Schedule C, entry 100 meant for "vanaspati" (hydrogenated vegetable oil). Margarine is a product manufactured by the respondent used for cooking especially for bakery products. Different vegetable oils, viz., coconut oil, groundnut oil, mahua oil, maize (corn) oil, mango kernel fat, mustard oil, sunflower oil, palm oil, etc., can be used to get the margarine. Margarine is obtained by hydrogenation and emulsification. In the present appeal substantial question of law involved is:- "Whether the margarine is classified at Schedule C, entry 100 or Schedule C, entry 107(11)(F) liable at four per cent of tax or entry El and taxable at 12.5 per cent from February 1, 2008 under the Maharashtra Value Added Tax Act, 2002?" & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our per cent. Though vanaspati and margarine both are obtained by the process of hydrogenation, margarine needs to undergo further process of emulsification. Vanaspati is in grainy form and margarine is pasty. While manufacturing bakery margarine, water and teel oil is added as per PFA (Prevention of Food Adulteration) requirement. Margarine though is manufactured from vegetable oil, it ceases to be hydrogenated vegetable oil in common parlance after conversion. The chemical properties of vanaspati and margarine are different and vanaspati is not used as a bakery product. It was argued that therefore, though in the case of Tungabhadra Industries Ltd. v. Commercial Tax Officer, Kurnool [1960] 11 STC 827 (SC), hydrogenated groundnut oil which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine is a distinct commodity from vanaspati, a hydrogenated vegetable oil. Hence it was rightly decided by the Commissioner of Sales Tax (CST) that it falls under entry El and taxable at 12.5 per cent. Per contra, it was argued that margarine contains the similar ingredients of vanaspati which is obtained by process of hydrogenation and further emulsification. The emulsifying agents, anti oxidant, salt, water, fatty acid, do not change the basic component and nature of hydrogenated vegetable oil. These agents are mixed to make margarine usable for the purpose of bakery products which helps to make the bakery items more crispy and fluffy. Vanaspati and margarine both are semi solid substance resembling butter in consistency. It was ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. v. Collector of Central Excise, Bombay reported in [1997] 106 STC 214 (SC) on the point that the onus is on the Revenue to prove that an item falls in a particular entry. He also relied on the case of Commissioner of Central Excise v. Simplex Mills Co. Ltd. reported in [2005] 140 STC 125, wherein the Supreme Court has interpreted the word "made up" for the purpose of classification. (Made up goods and non-made up goods). The learned counsel for the respondents submitted that facts in State of Kerala v. Aluva Sugar Agency reported in [2007] 8 VST 726 (Ker), are distinguishable. In the said case a margarine was classified under entry 19 of the First Schedule to the Kerala General Sales Tax Act which deals with oil, edible or inedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s mainly used for bakery products rather in the western countries bakery products, i.e., bread, biscuits, donuts, muffins are the main food items used everyday. Margarine makes the food item crispy and fluffy. Vanaspati and margarine both are used for the purpose of cooking and both are used as replacement of ghee and vegetable oils. Though vanaspati is grainy and margarine is pasty, both are semi solid white/creamish oil based substances. Due to 20 per cent antioxidents, permitted emulsifying agents and water contents in margarine the desired results of baked product is facilitated. It was argued by the learned counsel for the Revenue that under the Central Excise Tariff Act, margarine is covered by excise heading (1517) whereas, v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable at four per cent so under principle of parity margarine which is produced by the respondents is rightly made taxable at four per cent by the Tribunal by its judgment dated July 9, 2010. We would like to point out that during the period 2006-08 after introduction of the Maharashtra Value Added Tax Act, margarine produced by the respondents was classified in Schedule C, entry 100 as vanaspati and was taxable at four per cent till the decision of the A. O. Since long period, view taken by the Tribunal holds the field so we fail to understand what made A. O. to change his view. We place reliance on the judgment in the case of Merind Ltd. v. State of Maharashtra reported in [2004] 136 STC 462 (Bom), that once a particular view is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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