COLLECTOR OF CENTRAL EXCISE, HYDERABAD versus JAYANT OIL MILLS PVT. LTD .

Citation: [1989] 2 S.C.R. 291 · Decided: 31-03-1989 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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COLLECTOR OF CENTRAL EXCISE, HYDERABAD 
v. 
JAYANT OIL MILLS PVT. LTD . 
MARCH 31, 1989 
[SABYASACHI MUKHARJI AND 
S. RATNAVEL PANDIAN, JJ.I 
Central Excises and Salt Act, 1944-Sections 36(2) and 35L and 
Notification No. 9/60 dated February 20, 1960 hydrogenated rice bran 
oil used in manufacture of soap-Assessibility to excise duty Tariff Item 
No. 12 or Item No. 68 of Central Excise Tariff 
The question that arises for determination In the appeals is 
whether the hydrogenated rice bran oil manufactured by the Respon-
dents, could, as claimed by them, be classlfted under Tariff Item 
No. 12. 
Respondent herein manufacture hydrogenated rice bran oil, 
which is used as raw material In the soap-making and in other 
industries. The Respondent Died a classification list classifying the said 
product under Tariff Item No. 12 and claimed exemption from payment 
of excise duty. 
The Asst!. Collector of Central Excise, who dealt with the matter 
held that the said goods was a new product after manufacture, having a 
distinct name, character and use and as such It fell under Tariff Item 
68-CET and not Item 12. The Respondent preferred an appeal before 
the Appellate Collector of Central Excise, Madras. The Appellate 
Collector reversed the order of the Asstt. Collector and held that 
hydrogenated rice bran oil is classifiable under Tariff Item 12-CET and 
granted the consequential relief. The order of the Collector was con-
firmed by the Customs, Excise and Gold (Control) Appellate Tribunal. 
Hence the appeal under Section 35 L of the Central Excises & Salt Act by 
the Department. 
Dismissing the appeals, the Court, 
HELD: Indubitably hydrogenation of rice bran oil is a process. 
But all processes need not be manufacture. It must be such a process 
which transforms the old articles into goods and changes the Identity, 
A 
B 
c 
D 
E 
F 
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use and the purpose of use in the goods undergone by the process. By 
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291 
292 
SUPREME COURT REPORTS 
[1989] 2 S.C.R. 
A the process of manufacture a new identifiable goods, in the market as 
such must come into being. [295E·Fl 
The melting point of the hydrogenated rice bran oil is 45'c and it 
is in the nature of extra-hardened vegetable process which is unfit for 
human consumption. It was taken to be classifiable under Tariff Item 
B 68-CET. [295F] 
Rice bran oil is extracted out of rice bran by solvent extraction 
method. After such extraction rice bran oil obtained is in liquid form. 
The parties purchase rice bran oil from the market and process it. The 
process is as follows. The oil is heated to above 80'C and the impurities 
c are removed by adding oxalic acid and caustic lye. The purified oil is 
then bleached by heating it to 85°C to lOO'C and thereby 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 fetty acid present in the oil becomes 
saturated. The oil is then in a semi-solid condition and its melting 
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point is raised to 45°C or more. In the hardened state, the oil looks 
like Vanaspati (or vegetable product, to use the Central Excise termi· 
nology) but there is a difference in the degree of hydrogenation of the 
two. [295H; 296A-C] 
In order to differentiate between the edible hydrogenated oils 
E (Vanaspati) and super hydrogenated vegetable oils, the latter are 
referred to as extra hardened oil or super hardened oil. [296C-D] 
This hardening of oil is necessary for soap-making, otherwise, the 
soap, on coming into contract with water is likely to become soggy. 
The Respondents use the hardened oil for soap making in their 
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factories. Besides its use in soap making, the extra-hardened oil is 
also put to various other industrial uses, such as for application as 
greases. [296D-E] 
It is obvious that hydrogenated oil is nothing but hardened vege-
table oil which would fall within Item 12 CET for the purpose of Central 
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Excise duty. [300A] 
Item 12 is more specific than Item 68, for all hardened technical 
oil not fit for human consumption and as such, would be covered under 
this category. l300G I 
1:1 
Tungabhadara Industries Ltd. v. The Commercial Tax Officer, 
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COLLECTOR OF CENTRAL EXCISE v. IA YANT MILLS (MUKHARJJ, J.( 
293 
Kurnool, [1961] 2 S,C.R. 14, followed. 
Champakla/ v. State of Gujarat, AIR 1980 SC 1889; WP Ltd. and 
Anr. v. Union of India &

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