Exemption for composite oil mill units depends on unit character, not whether refined oil was made from imported inputs.

An exemption notification for a composite oil mill and solvent extraction unit was interpreted by reference to the nature of the industrial unit, not the source of the oil refined. Temporary suspension of crushing operations did not change the unit's character, and the notification was held not to require that the input oil be produced within the factory from the unit's own seeds or expellers. Earlier Revenue authorities were distinguished, and the eligibility view was followed. The exemption was therefore available even where the refined oil was made from imported oil, confirming that unit classification governed entitlement.

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Issues: Whether the respondent was entitled to exemption under Notification No. 115/75-C.E. in respect of refined products manufactured from imported oil in a refinery attached to an oil mill and solvent extraction plant.

Analysis: The respondent's unit was accepted as a composite oil mill and solvent extraction industry falling within the description in the notification. The temporary suspension of crushing operations did not alter the character of the unit, and the notification did not impose any condition that the oil refined in the unit must have been produced within the factory from the respondent's own seeds or expellers. The earlier decisions relied on by the Revenue were distinguished, while the view supporting eligibility was followed.

Conclusion: The respondent was entitled to the benefit of Notification No. 115/75-C.E. even in respect of imported oil, and the Revenue's appeals failed.

Final Conclusion: The exemption claim was upheld on the footing that the nature of the manufacturing unit, and not the source of the oil refined, governed eligibility under the notification.

Ratio Decidendi: Where an exemption notification applies to a specified type of industrial unit, eligibility cannot be denied merely because the raw material refined in the unit was imported, if the notification does not require that the input must be produced within the factory.

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