Decided on May 26,2015

Godavari Edible Bran Oil Ltd. Appellant
C.C.E., S.T. And C., Visakhapatnam -Ii Respondents


B.S.V.MURTHY, J. - (1.)The appellant is engaged in the manufacturing of refined rice bran oil falling under Chapter 15 of the Schedule to the Central Excise Tariff Act, 1985. Even though the impugned order was passed against M/s. R.R. Refineries Ltd. (RRRL for short), since RRRL has been amalgamated with the appellant, the appellants are pursuing the matter before us. Before amalgamation, the appellant in their factory premises were crushing oil seeds/extracting crude oil from the seeds. Since during the year 2000, appellants had no facilities to refine the crude oil so extracted, they got it done by RRRL situated adjacent to their premises. RRRL undertook conversion of crude rice bran oil to refined rice bran oil on job work basis under the supervision and control of the appellant and the finished products were cleared from the premises of RRRL to the appellants' customers. When the contract was entered into, there was no duty on refined oil. Investigations commenced in May, 2004. As a result of which, proceedings were initiated which has culminated in confirmation of demand for Central Excise duty of Rs. 1,40,97,966/ - for the period from June, 2001 to February, 2006. Penalty under Sec. 11AC also was imposed. In the impugned order, it has been held that the prescribed procedure under Notification No. 214/86 was not followed and therefore, RRRL or the appellant is liable to pay duty. The Commissioner also considered the appellant's claim for the benefit of Notification No. 115/75 as amended which exempts goods manufactured in a factory coming under the category of oil mill or solvent extraction industry on the ground that the factories involved in refining and extracting crude oil are separate and to get the benefit of exemption, entire activity has to be in one factory.
(2.)The learned counsel for the appellants submitted that appellants are entitled to the benefit of Notification No. 115/75 -C.E. and relies upon decision in the case of Bombay Oil Industries Ltd. v/s. CCE [ : 1997 (91) E.L.T. 538 (S.C.)] to submit that they are eligible for the benefit of Notification No. 115/75.
(3.)Notification No. 115/75 as amended exempts goods manufactured in oil mill and solvent extraction industry. The Hon'ble Supreme Court after considering the submissions in Paragraph 3 observed as follows: - -
3. The said notification exempts goods manufactured in factories covered by the industries specified in the Schedule. Item 4 of the Schedule specifies the oil mill and solvent extraction industry. It may be that ordinarily an industry of this nature would have both an oil mill and a solvent extraction plant both of which manufacture vegetable oils, but that is no reason, in our view, to place upon the plain words of the notification a narrower meaning than that to which they plainly lend themselves. The notification exempts goods manufactured in factories of the oil mill and the solvent extraction industry. The appellants goods are goods manufactured in a solvent extraction plant and must, on the plain words of the notification, receive the benefit of the exemption that it confers.


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.