2005 (4) TMI 61 - SC - Central Excise

Supreme Court affirms Tribunal's decision on excise duty benefits, manufacturers' claim rejected.

VINAY SOLVENT EXTRACTION INDUS. PVT. LTD. Versus CC. EX., GUJARAT

The Supreme Court upheld the Tribunal's decision, dismissing the appeals and confirming that the Appellants were not entitled to the benefit of ... Whether the Appellants are entitled to benefit of Notification No. 262/86-C.E., dated 24th April, 1986? Held that:- The Appellants have accepted the authorization. They have shown themselves to be manufacturers. The Appellants are complying with the formalities under the Central Excise Act. The Appellants maintain the requisite records. The Appellants clear the goods. Condition No. (ii) of the Notification has been complied with by the Appellants and not by Vijay Oil Mill. It is the Appellants who had filed the classification list. It is the Appellants who had claimed the benefit of the said Notification. It can hardly now lie in the mouth of the Appellants to claim that Vijay Oil Mills were the real manufacturers. Further, as stated above, even if Vijay Oil Mills were the manufacturer they would not be entitled to the benefit of the Notification as they hold no licence nor comply with formalities under the Central Excise Act. They do not even pay excise duty. Thus no question arises of Vijay Oil Mills claiming benefit of the said Notification. Appeal dismissed. Issues Involved:1. Entitlement to benefit under Notification No. 262/86-C.E., dated 24th April, 1986.2. Determination of the actual manufacturer.3. Compliance with conditions under the Central Excise Act and related notifications.4. Validity of certificates produced for claiming exemption.Detailed Analysis:1. Entitlement to Benefit under Notification No. 262/86-C.E., dated 24th April, 1986:The primary issue was whether the Appellants were entitled to the benefit of Notification No. 262/86-C.E. This notification exempts fixed vegetable oils falling under sub-heading 1503.10 from excise duty, provided certain conditions are met, including the production of a certificate from the Directorate of Vanaspati, Vegetable Oils and Fats confirming that the oil was manufactured from fixed vegetable oils extracted by the solvent extraction method. The Appellants produced certificates indicating that Vijay Oil Mills manufactured the oil, which was insufficient since the Appellants were the actual manufacturers.2. Determination of the Actual Manufacturer:The Appellants and Vijay Oil Mills entered into a lease agreement, where the Appellants undertook manufacturing activities on behalf of Vijay Oil Mills. The Appellants accepted the authorization to manufacture and comply with excise formalities, thus acknowledging themselves as the actual manufacturers. The Tribunal and lower authorities confirmed this, rejecting the Appellants' contention that Vijay Oil Mills were the manufacturers.3. Compliance with Conditions under the Central Excise Act and Related Notifications:The Appellants were required to comply with procedural formalities and maintain records as per the Central Excise Act. The Appellants filed the classification list and claimed the benefit of the notification as manufacturers. The Tribunal found that the Appellants, not Vijay Oil Mills, complied with these conditions. The Appellants' attempt to present Vijay Oil Mills as the manufacturer was contrary to the facts and authorization documents.4. Validity of Certificates Produced for Claiming Exemption:The Appellants produced certificates from the Directorate of Vanaspati, Vegetable Oils and Fats, stating that the oil was manufactured by Vijay Oil Mills. However, since the Appellants were the actual manufacturers, these certificates were not valid for claiming the exemption. The required certificate had to state that the oil manufactured by the Appellants was from fixed vegetable oils extracted by the solvent extraction method. The Appellants' failure to produce such certificates meant they did not meet the conditions for the exemption.Conclusion:The Supreme Court upheld the Tribunal's decision, dismissing the appeals and confirming that the Appellants were not entitled to the benefit of Notification No. 262/86-C.E. The Appellants were the actual manufacturers and failed to produce the necessary certificates. The contention that Vijay Oil Mills were the manufacturers was rejected, and the Appellants' compliance with excise formalities was noted. The request for remand was denied, affirming the findings of the lower authorities.