Common parlance test for animal or vegetable products excludes biscuit, bread and cake manufacture from processing classification

Entry 15 of Schedule I to the Water (Prevention and Control of Pollution) Cess Act, 1977 covers industries processing animal or vegetable products, and the term "vegetable product" is to be understood in common parlance rather than in a botanical sense. Wheat flour was not regarded as a vegetable product in ordinary use, and milk powder was not treated as an animal product merely because it was derived from milk. Manufacturing biscuits, bread and cake with those materials was therefore treated as manufacture using ingredients, not processing the underlying animal or vegetable products. The industry was held outside Entry 15 and not liable to cess on that basis.

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Issues: Whether the appellant's industry fell within Entry 15 of Schedule I of the Water (Prevention and Control of Pollution) Cess Act, 1977 so as to be treated as processing animal or vegetable products and made liable to cess.

Analysis: Entry 15 was construed to mean an industry that processes animal or vegetable products. The expression "vegetable product" was read in common parlance and not in a botanical sense. Wheat flour was not understood in common parlance to be a vegetable product, and milk powder, though derived from milk, was not itself an animal product. The manufacture of biscuits, bread and cake by using wheat flour and milk powder was held to be the utilisation of those materials as ingredients in a manufacturing activity, not the processing of the materials themselves. The process produced different goods and amounted to manufacture rather than processing of animal or vegetable products.

Conclusion: The appellant's industry did not fall within Entry 15 and was not liable to cess on that basis.

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