TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 61
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.... under: Gross turnover: Rs. 17,67,76,050/- ; Exempted Turnover: Rs. 13,58,41,010/- and Net Turnover: Rs. 4,09,35,040/-. A tax of Rs. 2,23,875/- was levied. The Assistant Commissioner (CT) (Intelligence), Kakinada (the AC (CT) for brevity) vide proceedings dated 24.06.1999 in CF.No.75/98-99 had initially assessed the dealers provisionally for the said year under the CST Act and levied tax @ 10% on the sales of rice bran fatty acid and rice bran acid oil (RB fatty acid and RB acid oil for brevity) treating them as general goods falling under the VII schedule of the APGST Act. Aggrieved of the orders of the A C (CT) (Intelligence), the appellant had preferred an appeal before the Appellate Deputy Commissioner (CT) (the ADC (CT) for brevity) in E.94/1999-2000 inter alia contending that the said goods are to be treated as falling under entry 24(c) of the first schedule of the APGST Act but not as general goods and that therefore, tax has to be levied at the rate of 1% as applicable to the goods under the said entry. The ADC (CT) while allowing the said appeal had held that rice bran acid oil and rice bran fatty acid though not specifically mentioned in entry 24(c) of first schedule of t....
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....manufacturing units and that the unit is manufacturing refined oil as a finished product and in the process of refining, the unit is removing the intermediary products viz., RB fatty acid and RB acid oil as concomitant products. Thus, the ADC had rightly concluded that the said RB acid oil and RB fatty acid continue to be Rice Bran Oil. The ADC, before passing the orders, had bestowed his attention to the process of refining by making a personal inspection and had, in detail, examined the processes involved in obtaining Rice Bran Oil, RB fatty acid and RB acid oil. Hence, the finding of the ADC that RB acid oil and RB fatty acid are intermediate products and are not being separately produced in separate manufacturing units and that they are generated in a single unit in a continuous process of manufacturing and that they cannot be treated as different commodities from Rice Bran Oil is a well considered finding. The Commissioner had found fault with such unassailable finding without properly appreciating the facts and without assigning any valid reasons. The ADC had quoted extensively from the various decisions in support of his findings and, therefore, the findings of the ADC are s....
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....pecial appeal. 5. We have given earnest consideration to the facts and the submissions. We have carefully gone through the relevant provisions and the entries in the schedule of the statute. 6. Now the point for determination is: Whether RB Acid Oil and RB Fatty Acid can be considered as distinct and different from Rice Bran Oil? 7. POINT: The facts are not in dispute. 7. (a) Since the first contention of the appellant/dealer is based upon the amendment introducing entry 24-F with effect from 01.11.2000 by Act No.30 of 2001, it is necessary to refer to the relevant entries hereunder. Entry 24-A reads as under: 24-A Vegetable Oils, (non- refined) including groundnut oil, gingelly oil, safflower oil, sunflower oil, soya been oil, mustard oil, kusum oil, tobacco seed oil, castor oil, washed cotton seed oil other than rice bran oil and coconut oil. At the point of first sale in the State 2 4 16.08.1995 01.01.2000 By Act No.30 of 2001 entry 24-F was inserted with effect from 01.11.2000. The said entry reads as under: 24-F Sledge Oil, Acid Oil & Fatty Acid At the point of first sale in the State 8 paise 01.11.2000 Entry 24-C of Schedule I of APGST Act reads as under: 24-C Rice....
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....able under sub-section (1) of Section 8 of the said Act by a dealer having his place of business in the State of Andhra Pradesh shall in respect of the sales in the course of inter-State trade or commerce, of rice bran oil be at the reduced rate of one paise in the rupee. This notification shall be deemed to have come into force with effect from 01.04.1997 and shall be in force upto 31st March, 1999 only. 7. (c) It is necessary to now advert to the cited decisions. In the decision in Collector of C. Ex. v. Jayant Oil Mills Pvt. Ltd., (1st cited) the facts are as follows: - The respondent therein manufactured hydrogenated rice bran oil which was sold to industrial consumers. The said hydrogenated rice bran oil is used as raw material in the manufacture of soap. The respondent had classified the same under Tariff Item 12 for approval and claimed exemption under a Notification. However the Assistant Collector, Central Excise held that the hydrogenated rice bran oil was classifiable under Tariff Item 68 of the Central Excise Tariff because hydrogenated rice bran oil is solid at the ordinary temperature and therefore, should be considered as fat and not as oil. When the said order was....
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....ies Ltd., (2nd cited) the question was as to whether hydrogenated oil was not groundnut oil. One of the questions also considered was whether if beyond the process of refinement of the oil, the oil is hardened, again by the use of chemical processes it is rendered any the less groundnut oil. The Supreme Court held as follows: No-doubt several oils are normally viscous fluids, but they do harden and assume semi-solid condition on the lowering of the temperature. Though groundnut oil is, at normal temperature, a viscous liquid, it assumes a semi-solid condition if kept for a long enough time in a refrigerator. It is therefore not correct to say that a liquid state is an essential characteristic of a vegetable oil and that if the oil is not liquid, it ceases to be oil. Mowrah oil and Dhup oil are instances where vegetable oils assume a semi-solid state even at normal temperatures. Neither these, nor coconut oil which hardens naturally on even a slight fall in temperature, could be denied the name of oils because of their not being liquid. Other fats like ghee are instances where the physical state does not determine the identity of the commodity. Therefore, it is clear from the fact....
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....commodities commercially known in common parlance for distinct and different use. Thereby groundnut protein flour did not remain part of the genus, i.e., deoiled cake, but became a new and different entity known in the commercial parlance. Accordingly, it is exigible to CST at the relevant time at 4 per cent. The appeals, therefore, are allowed. In the latest decision in Aluva Sugar Agency v. State of Kerala the short question which arose for consideration was Whether sale of margarine is to be taxed at 8% or 4% under the provisions of Kerala General Sales Tax Act, 1963? Under the said question the main issue that was considered was whether margarine can be treated as edible oil and thus falls under entry 17A of the said Act. The Supreme Court held as follows: Margarine is a generic term and it is used as a substitute for butter. It is used in preparation of food articles and specially used for preparing bakery products. For the purpose of manufacturing margarine, refined and/or hydrogenated oils of sun-flower, soyabean, cotton seed, palmoline, palm and sesame oils are used. Moreover, vegetable oils, salt, permitted emulsifiers and stabilizers are also used for manufacturing marg....
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....turing Rice Bran Oil, are different commodities and entities known differently in commercial parlance and whether such emerged commodities are distinct from Rice Bran Oil. Secondly, whether such distinct and different commodities are capable of being put to the same use? Thirdly, whether such distinct and different commodities differ not only in character and economic perspective but also in common and commercial parlance understanding? On the application of the tests and on consideration of the facts and circumstances of the case, we are of the considered view that RB Fatty Acid and RB Acid Oil are distinct and different from Rice Bran Oil. Admittedly Rice Bran Oil is an edible oil whereas the other two commodities viz., RB Fatty Acid and RB Acid Oil are useful for manufacturing of soaps and are not edible. How an article or commodity is understood in the trade i.e., by the dealer or customer is also one of the important considerations. Functional utility and predominant usage have also to be taken into account while determining the class of commodity. The law is well settled that in the law dealing with sales tax, the taxable event is the sale and not the manufacture of goods. Ne....