AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
1983 (2) TMI 314
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....ills are said to have produced between January, 1974 and July, 1974. In his order No. V(12) 2-16/75/1677, dated 29-1-1976, the Appellate Collector of Central Excise, Bombay confirmed the order of the Assistant Collector and came to the finding that the duty on V.N.E. oil had to be paid by the appellants. 2. Under Notification No. 33/63-Central Excise, V.N.E. oil used in the manufacture of goods falling under Items 13, 14 and 15 of the Central Excise Tariff were exempted from duty. The notification also has a proviso that the exemption is not applicable if the finished products were not liable to excise duty or chargeable to nil rate of duty. The mills after processing the oil, hardens it to obtain vegetable tallow referred to as Harde....
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.... is an admitted fact which the Department does not controvert. Furthermore, the mills' claim that the hardened oil was moved to Calcutta under Chapter X of Central Excise Rules is also expressly accepted by the Department. Under this Chapter, certain exemptions are given to excisable goods when they are moved to another factory to be used in further manufacture of other excisable goods. Here, the hardened oil was moved to Calcutta for the manufacture of soap. Because the movement under Chapter X was made without the goods being levied to duty, the department held that the proviso to Notification No. 33/63-Central Excise disentitled their raw material i.e., VNE oil which was used in the manufacture of the tallow, from exemption under that no....
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....rose from the processing of the V.N.E. oil first into hardened oil and then into soap. We accordingly direct that the vegetable non-essential oil should be assessed free of duty and refund given, if the sum demanded has been paid by the mill. 6. A question arose during the proceeding before the Department that the hardened oil referred to as Hardened Technical Oil or H.T.O. was not a product assessable under Item No. 13 of Central Excise Tariff because its melting point was about 45°C. This claim of the factory was rejected by the Appellate Collector in the following words : "The appellants have argued that the melting point of H.T.O. is about 45°C and therefore this product is not fit for human consumption and therefore cann....
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....r whether to deny it because it had moved under Chapter X procedure without payment of duty. However, in view of our admission of the appeal, we will not go into this question whether the hardened vegetable tallow in this case was excisable under Tariff Item 13 or not especially when the question is not a dispute before us. 7. [Minority View per : M. Gouri Shankar Murthy]. - I have had the advantage of a careful perusal of the Order proposed to be made by my learned brothers in this transferred proceeding [heard as an appeal pursuant to Section 35(P) of the Central Excises and Salt Act, 1944]. 8. I regret, however, my respectful inability to agree should have made it necessary to pronounce a dissenting Order. 9. The facts ....
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....to the description contained in Item 13 of the 1st Schedule to the Act, that the instant appeal has to be decided. To hold either that - (a) the goods in question are not excisable products in terms of Item 13, because they were unfit for human consumption; or (b) the finished product was soap and not the goods in question, is to fly in the face of the conclusive findings as well as the admission at the bar. 11. Once this were so, all that is necessary is to examine the applicability of the benefit of exemption in the relevant notification, in the context of - (a) the process carried on in relation to vegetable non-essential oil, thereby rendering it exigible to duty under Item 12 of the 1st Schedule to the Act; (b)....
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.... duty is payable either under Item 12, or Item 13 and this notwithstanding that they have not paid the duty leviable on the intermediate excisable goods falling under Item 13. 14. The contention has only to be stated to be rejected. The intent of the notification is not to exempt "finished excisable goods" falling under Item 12 as well as Item 13 if ultimately goods conforming to Item 14 are manufactured and duty paid thereon. If that were the intent, there is hardly any necessity for a specific mention of goods conforming to Item 13 of the 1st Schedule in the notification. In fact, the specific inclusion of Item 13 in the notification would defeat the very purpose of exempting goods under Item 12 when used for the manufacture of soap....