TMI Blog2004 (11) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly 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. Appeal allowed. - 1287-1289 of 1999 - - - Dated:- 23-11-2004 - S.N. Variava, Dr. A.R. Lakshmanan and S.H. Kapadia, JJ. [Judgment per : S.N. Variava, J.]. - These Appeals are against the Judgment dated 16th November, 1998 of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). 2.Briefly stated the facts are as follows : The Appellants purchase edible vegetable oil from the open market. On the oil purchased by them excise duty has been paid by the manufacturer. The Appellants subject this oil to certain processes for the purposes of refining the oil. After refining the oil, the Appellants sell the refined edible oil in the market. The Appellants filed, on 1st September, 1984, a classification list in respect of the refined oil sought to be cleared from the factory. It was mentioned therein that since no manufacturing activity was involved, no duty was payable on their clearances. On 17th September, 1984, the Superintendent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on arose between the Judicial Member and the Technical Member. Therefore, the matter was referred to a Third Member of the Tribunal. The Third Member of the Tribunal agreed with the Technical Member and held that there was manufacture and the Appellants' goods were classifiable under Tariff Item 1503.10. It is held that duty is leviable on the same. Against this Order, the present Civil Appeals have been filed. 8.On 26th February, 1999 the CEGAT also disposed of the Appeal filed by the Appellants against the Order dated 22nd January, 1992. Against that Order Civil Appeal No. 3923 of 1999 has been filed. 9.The question for consideration is whether processing of the edible vegetable oil, purchased by the Appellants, results in manufacture. It is not denied that the refined oil, which is derived after the process, is a marketable commodity. 10.As set out hereinabove, all the authorities below have held that there is manufacture and that the refined edible oil falls under Tariff Item 1503.10. 11.It is necessary, at this stage, to note the concerned Tariff Item. It reads as follows : "15.03 Fixed vegetable oils, other than those of heading No. 15.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ender the product marketable to the consumer; (iv) in relation to goods comprised in Item No. 18A of the First Schedule, includes sizing, beaming, warping, wrapping, winding or reeling, or any one or more of these processes, or the conversion of any form of the said goods into another form of such goods; (v) in relation to goods comprised in Item No. 19-1 of the First Schedule, includes bleaching, mercerizing, dyeing, printing, waterproofing, rubberizing, shrink-proofing, organdie processing or any other process or any one or more of these processes; (vi) in relation to goods comprised in Item No. 21(1) of the First Schedule, includes milling, raising, blowing, tentering, dyeing or any other process or any one or more of these processes; (vii) in relation to goods comprised in Item No. 22(1) of the First Schedule, includes bleaching, dyeing, printing, shrink-proofing, tentering, heat-setting, crease resistant processing or any other process or any one or more of these processes. (viii) in relation to aluminium, includes lacquering or printing or both of plain containers, and the words, "manufacturer" shall be construed accordingly and shall include not only a person who e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw oil which is not really oil. The elements removed in the refining process consist of free fatty acids, phosphotides and unsaponifiable matter. After the removal of this non-oleic matter therefore, the oil continues to be groundnut oil and nothing more. The matter removed from the raw groundnut oil not being oil cannot be used, after separation, as oil or for any purpose for which oil could be used. In other words, the processing consists in the non-oily content of the raw oil being separate and removed, rendering the oily content of the oil 100 per cent. For this reason refined oil continues to be groundnut oil within the meaning of Rules 5(1)(k) and 18(2) notwithstanding that such oil does not possess the characteristic colour, or taste, odour, etc. of the raw groundnut oil." 18. Thus, this Court has held that prior to refining, it was raw groundnut oil and after refining even though the characteristic colour, taste and odour may have changed it remained ground oil. In other words, this Court held that there was no manufacture of a new and distinct commodity. 19. This Court has held in a number of decisions that merely because some process has been carried on it is not ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture it need not be so mentioned only in the Section or Chapter Note and that it could also be so mentioned in the Tariff Item. It is true that the amended definition has not been taken note of. We are in agreement with the submission that under the amended definition, which is an inclusive definition, it is not necessary that only in the Section or Chapter Note it must be specified that a particular process amounts to manufacture. It may be open to so specify even in the Tariff Item. However, either in the Section or Chapter Note or in the Tariff Entry it must be specified that the process amounts to manufacture. Merely setting out a process in the Tariff Entry would not be sufficient. If the process is indicated in the Tariff Entry, without specifying that the same amounts to manufacture, then the indication of the process is merely for the purposes of identifying the product and the rate which is applicable to that product. In other words, for a deeming provision to come into play it must be specifically stated that a particular process amounts to manufacture. In the absence of it being so specified the commodity would not become excisable merely because a separate Tariff Item e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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