TaxTMI 
TaxTMI 
1996 (10) TMI 318
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....memorandum of appeal and also during the course of personal hearing. The main point that has been taken up by the appellants is that the processing loss was admissible in terms of Notification No. 40/87 which ground has been contested by the adjudicating authority. So far as the question of processing loss is concerned, on a very strict reading of the Notification there is nothing in it to indicate that processing loss is allowable. I, therefore, uphold the Asstt. Collector's order and reject the appeal." 2. The facts of the case are that the appellants are engaged in the manufacture of various goods including soap and are availing credit of money on oils both rice bran oil and minor oil specified under Notification No. 40/87-C.E., ....
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....amounting to Rs. 1,04,370/- wrongly and that the same was liable to be recovered u/r 57P of the C. Ex. Rules, 1944. A show cause notice was issued to the appellants accordingly. On careful consideration of the submissions made by the appellants, the A.C., in his order-in-original, disallowed credit of money amounting to Rs. l ,04,370/- and ordered that reverse entry should be made for this amount in the relevant register and if there was not sufficient balance, this amount should be deposited under TR-6 challans. 3. Shri J.P. Kaushik, the ld. Advocate appearing for the appellants submitted that Notification No. 40/87-C.E. clearly provided for money credit on the quantity of oils issued for hydrolysis. He submitted that the interpret....
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....of the final products, namely, soap falling under sub-heading No. 3401.10 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and  (ii) the rates in the corresponding entry in column (3) of the said Table as the rate at which credit may be granted for use of said input in the manufacture of the said final product, For the purposes of Section AAA of Chapter V of the said rules and stipulates that the grant of credit and utilisation thereof, shall, in addition to the provisions of the said section, be subject to the following conditions, namely : (i) the credit shall be taken only in respect of the quantity of oil subjected to the process of saponification or the process of hydrolyzation where such hydr....
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.... TABLE S. No. Fixed Vegetable Oils Rate of credit per tonne of the fixed vegetable oil (1) (2) (3) 01. Rice bran oil 320 Rs. 02. Neem oil Rs. 2800 03. Karanj oil Rs. 2800 04. Kusum oil Rs. 2800 05. Sal oil Rs. 2800 06. Khakhan oil Rs. 2800 07. Mahua oil Rs. 2800 08. Rubberseed oil Rs. 2800 09. Mango-kernal oil Rs. 2800 10. Kokum oil Rs. 2800 11. Dhupa oil Rs. 2800 12. Undi oil Rs. 2800 13. Maroti oil Rs....
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....roduct shall be calculated with reference to the weight of such oils and the total] weight of the mixture of oils immediately before such mixture is subject to the process of hydrogenation for conversion into the said vegetable product". (Emphasis supplied) Unquote From the above, we find that all along the Government's intention was to give exemption only with reference to the weight of minor oils present in the total weight of mixture of oils immediately before such mixture is subject to the process of hydrogenation for conversion to V.P. It did not extend to the percentage calculated with reference to the quantity of raw oil drawn for hydrogenation. What was given by way of an exemption in the above manner is now given by way of....