Solvent-extracted oil treated as a distinct commodity, so vegetable oil cess was not payable under the levy.

Cess under the Vegetable Oil Cess Act, 1983 was held not leviable on oil produced by the solvent extraction method because such oil was treated as a distinct commercial commodity, not vegetable oil for cess purposes. The Bombay High Court view, said to have been upheld by the Supreme Court, and the later A.P. Rice Bran Solvent Extractors Association decision were relied on to support the same interpretation. On that basis, solvent extracted oil fell outside the cess levy and the assessee succeeded.

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Issues: Whether cess under the Vegetable Oil Cess Act, 1983 was leviable on oil produced by the solvent extraction method.

Analysis: The Bombay High Court had held that oil extracted from oil cakes by solvent extraction was not vegetable oil but a distinct commercial commodity, and therefore outside the cess levy. That view was stated to have been upheld by the Supreme Court. In addition, the later decision in A.P. Rice Bran Solvent Extractors Association supported the same position.

Conclusion: Cess was not leviable on solvent extracted oil, and the assessee succeeded.

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