Copra cess coverage upheld for oil mills under the Produce Cess Act, with the levy read broadly across mill consumption.

Copra consumed in mills for producing oil was treated as falling within the cess under Section 3 of the Produce Cess Act, 1966 read with item 2 of the Second Schedule. The Kerala HC read the relevant entry in the context of the charging provision and legislative scheme, and held that the phrase covering consumption of copra in any mill for producing or manufacturing goods was comprehensive rather than limited to mills producing soaps or similar end-products. It also relied on legislative history showing Parliament intended a cess on all copra consumed in mills. On that construction, oil produced from copra was goods within the entry, and the challenge to the notice and proposed assessment failed.

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Issues: Whether copra consumed in the petitioners' mills for producing oil fell within the scope of the cess under Section 3 of the Produce Cess Act, 1966 read with item 2 of the Second Schedule.

Analysis: The description of the relevant produce in the Second Schedule was construed in the context of the charging provision and the legislative scheme. The words referring to consumption of copra in any mill with a view to producing or manufacturing goods were treated as comprehensive and not restrictive of the levy to mills producing only soaps or similar end-products. The Court also relied on the legislative history, including the substitution of the earlier coconut-related cess, to hold that Parliament intended a cess on all copra consumed in mills. On a literal reading, oil produced from copra was also goods within the meaning of the entry.

Conclusion: The copra consumed by the petitioners in their mills was covered by the levy, and the challenge to the notice and proposed assessment failed.

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