TaxTMI 
TaxTMI 
TaxTMI 
1986 (3) TMI 92
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....fied oil is then bleached by heating it to 85°C to 100°C and then by treating with fullers earth. The processed oil is then hardened by passing it through hydrogen gas. During hydrogenation, the oil absorbs two atoms of hydrogen and the unsaturated Fatty Acid present in the oil becomes saturated. The oil is now in a semi-solid condition and its melting point has been raised to 45°C or more. In the hardened state, the oil looks like vanaspati (or vegetable product, to use the Central Excise terminology) but there is a difference in the degree of hydrogenation of the two. The melting point of vanaspati, which is a commonly used cooking medium, does not exceed 37°C while the melting point hardened rice bran oil in dispute before us is between 45°C-52°C. At such high melting point, the oils are no longer edible by human beings. In order to differentiate between edible hydrogenated oils (Vanaspati) and super hydrogenated vegetable oils, the latter are referred to as extra hardened oil or super hardened oil. The record before us shows that they are also known as "vegetable tallow" or 'hard lump' or 'hardened technical oil' or 'Industrial hard oil' or just 'hardene....
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....e Bench would hear and dispose of the entire appeal and the proceedings would not be confined to any particular reference point. 5. The appellants as well as the respondent made a preliminary objection saying that there was no provision in the Act to constitute a larger Special Bench. The Bench observed that under the provisions then in force, a classification matter had to be decided by a Bench of not less than three Members and that there was nothing in the Act to prevent the Hon'ble President from constituting a Bench of more than three Members. The Bench also observed that the order of the Hon'ble President constituting the present Larger Special Bench had been supplied to both sides. The parties did not press their point further. The appellants, however, desired that their objection may remain on the record because the issue regarding legal validity of Larger Special Benches was sub-judice before the Delhi High Court in another case. 6. The learned representative of the Department objected to the two interveners being heard. The interveners stated that though their appeals had already been decided by the Tribunal in their favour, yet they were vitally interested in the matte....
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....fell under Item 13 (vegetable product) ; the rest remained under item 12- "Vegetable non-essential oils, all sorts.........". 9. For their second proposition, the appellants relied on the Supreme Court's judgments in case Tungabhadra Industries Ltd. Kurnool v. Commercial Tax Officer, Kurnool (AIR 1961 S.C. 412) and in case Champaklal H. Thakkar & Others v. State of Gujarat and another (AIR 1980 S.C. 1889). It had been held in both these cases that hydrogenated oil (Vanaspati) still remained oil. The appellants added that though the Gujarat High Court had held that Vegetable Tallow fell under Item 68 of the C.E.T. [1980 E.L.T. 435 (Guj.). Navasari Oil Products Ltd. v. The Superintendent of Central Excise & Customs, Navasari and Others], this judgment was not binding on the Tribunal because the competing entries before the Gujarat High Court were Items 13 and 68 only and Item 12 of the tariff was never cited before the said High Court. They stated finally that the Department itself had now come round to the view that item 13 was inapplicable to extra hardened rice bran oil which was non-edible by human beings. They argued that Item 13 was in the nature of a proviso to Item 12-Item 1....
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....issible but not chemical alteration. He relied on technical literature to show that by the process of hydrogenation, the oil underwent an intermolecular change and its iodine value also changed. It became a modified oil and a composite product or synthesised product on account of absorption of hydrogen atoms. Such modified oils (by hydrogenation) fell under Item 13 if they were fit for human consumption, otherwise under the residuary item 68. He stated that vegetable tallow or extra hardened oil had been listed separately in the erstwhile Indian Customs Tariff as well as in the Customs Cooperation Council Nomenclature. It had been separately shown in technical books also. He read from commercial price quotations from the ECONOMIC TIMES to show that prices of oils and vanaspati had been listed but not that of vegetable tallow which, according to him, showed that the trade circles did not consider vegetable tallow as oil. He also took us to definitions of 'oil' in various other Acts and Rules, such as. Prevention of Food Adulteration Act and Rules, National Oil Seeds and Vegetable Oils Development Board Act, Vegetable Oil Product Control Order, the Export Control Policy book and the ....
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...."All other Goods, not elsewhere specified......". The material point to be considered, therefore, is whether extra hardened rice bran oil is oil or not. We do find an answer to this question in the Supreme Court's judgment in Tungabhadra case supra. It was a judgment delivered by a Bench of five Supreme Court judges. It was, no doubt, on hydrogenated groundnut oil (vanaspati) and not on ' extra hardened groundnut oil. It was also under the Sales Tax Act and not under the Central Excises Act. But in spite of these differences, we feel that this judgment of the Supreme Court provides us guidance in deciding the point in dispute before us. The appellants and the interveners are right in saying that, in general, the Sales Tax Act and the Central Excises Act are pari materia in the sense that both are commodity taxation Acts. In this judgment, the Supreme Court laid down the proposition that groundnut oil, on hydrogenation into vanaspati, remained groundnut oil. The Supreme Court, in coming to this conclusion, dealt with the arguments of physical and chemical change occurring in the oil after hydrogenation and held that in spite of these changes the basic character of the hydrogenated ....
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....r, that there is nothing conclusive about the name of the product as those who deal in it call it by various names, such as, vegetable tallow, hard lump, hardened technical oil, industrial hard oil etc. The product is bought and sold under these various names. This understanding of the concerned trade shows that the extra hardened rice bran oil is not considered as something different or distinct from oil. 15.There could be various reasons why financial papers like the Economic Times did not quote the prices of extra hardened oil under the category of oils. It could be that extra hardened oil had a very limited market among better quality soap makers etc. and the newspaper did not consider it worthwhile reporting its daily price fluctuations. We do not think that it would be proper to draw any conclusion one way or the other just because a financial newspaper did not report the prices of extra hardened oil. 16. Reliance of the learned representative of the department on the definition of 'oil' in various other Acts and Rules etc. is equally pointless. Those definitions are in a particular context and are designed to serve a particular purpose. They cannot be, and are not, applica....
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....v. Jayalakshmi Cotton and Oil Product Pvt. Ltd., Andhra Pradesh. 1985 (21) E.L.T. 166 (Tribunal) - M/s. Vital(2) & Vital Oil Pvt. Ltd. v. Collector of Central Excise, Bombay. We have already said earlier that in our view the ratio of the Supreme Court Judgment is binding on us in deciding the matter placed before us. We agree with the aforesaid two orders of the Tribunal which follow the same reasoning. 19. To sum up, we hold that extra hardened rice bran oil continues to remain a vegetable oil classifiable under item 12 of the Central Excise Tariff. Accordingly, we allow this appeal, set aside the impugned order-in-review of the Collector and restore the order-in-original of the Assistant Collector. Per : Shri S.D. Jha. V.P. (J). - 20. I would like to qualify my concurrence in the decision in the following words. 21In. Veg. Oils Ltd., Bombay v. Collector of Central Excise, Bombay-11 (1983 E.L.T. 1822) the Tribunal followed the decision of the Gujarat High Court in Navasari Oil Products Ltd.'s case (1980 E.L.T. 435) and approved the decision of Govt. of India in Hindustan Lever Ltd.'s case (1982 E L.T. 631 (G.O.I.) = 1981 E.C.R. 139D (G.O.I.). The Gujarat High Court decision ....