JAI BHAGWAN OIL & FLOUR MILLS versus UNION OF INDIA & ORS.

Citation: [2009] 7 S.C.R. 409 · Decided: 04-05-2009 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed

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

Judgment (excerpt)

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[2009] 7 S.C.R. 409 
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JAi BHAGWAN OIL & FLOUR MILLS 
A 
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V. 
UNION OF INDIA & ORS. 
Civil Appeal No. 3169 of 2009 
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MAY 4, 2009 
B 
(R.V. RAVEENDRAN AND HARJIT SINGH BEDI, JJ.) 
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Transport Subsidy Scheme • Clauses 4, 6 - Oil Cake 
c.. 'I' 
produced by an industrial unit in accordance with its 
manufacturing programme approved by the State Government c 
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- Whether fa/ls under 'finished goods' so as to be eligible for 
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transport subsidy - Held: Oil cake is 'finished goods' for the 
purpose of grant of transport subsidy - Hence appellant 
entitled_to the subsidy. 
The question involved in the appeal was whether oil D 
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cake .can be said to be 'finished goods'· produced by an 
industrial unit in accordance with its manufacturing 
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programme approved by the State Government, so as to 
be eligible for transport subsidy under the Transport 
Subsidy Scheme. 
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Allowing the appeal, the Court 
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HELD: 1.1 The object of the Transport Subsidy 
Scheme is not augmentation of revenue, by levy and 
collecti9n of tax or duty. The object of the Scheme 'is to 
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improve trade and commerce between the remote parts 
of the country with other parts, so as to bring about 
economic development of remote backward regions. This 
was sougtit to be achieved by the Scheme, by making it 
feasible and attractive to industrial entrepreneurs to start G 
and run industries in remote parts, by giving them a level 
~ --. ' playing field so that they could compete with their 
counterparts in centraf (nonrremote) areas. The huge 
transportation cost for getting the raw materials to the 
409 
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410 
SUPREME COURT REPORTS 
(2009] 7 S. C.R. 
A industrial unit and finished goods to the existing market 
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outside the State, was making it unviable for industries in 
remote parts of the country to compete with industries in 
central areas. Therefore, industrial units in remote areas 
were extended the benefit of subsidized transportation. 
B [Para 7] [416-8-E] 
1.2 When the Scheme refers to finished goods 
coming out of or being exported from the State (remote 
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area), it refers to any goods manufactured or produced 
by an industrJal unit in the State in accordance with the 
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c manufacturing programme approved by the central 
government and/or the state government. So long as the 
goods coming out is something identifiable, something 
which has undergone a process of manufacture, 
something which is marketable and tradable as a 
D commodity, something that is completely different and 
distinct from raw material as a product, something that 
... 
was intended to be a definite product of manufacture by 
the industrial unit, the product had to be considered a~ 
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'finished goods' from the industrial unit. Any goods which 
E goes in as a raw material required/used in the manu-
facturing programme of an industrial unit situated in a 
notified remote area, or any finished goods that is· 
produced in the industrial unit situated in such area and 
..,, 
exported out of the State, was eligible for the transport 
F subsidy under the scheme. [Para 7] [416-F-H; 417-A-B] 
2. It is well known that oil cake is the coarse solid 
residue obtained when oil is extracted from various types 
of oil seeds like peanuts, soyabeans, linseed, mustard, 
sesame and sunflower seeds. Oil cake is produced not 
G only in oil mills/industries, but also in village level Ghanis. 
The standard preservation/detoxification procedure for oil 
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cakes is sun-drying, controlled mechanical heating or by 
chemical processing. Oil 'cake is rich in proteins and 
minerals and commonly used as cattle feed and poultry 
H feed. Oil cake containing toxic elements (as for example. 
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JAi BHAGWAN OIL & FLOUR MILLS V. 
411 
UNION OF INDIA & ORS. 
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oil cake from castor beans) is used as fertilizer. Oil cake A 
has a wide ready market. It is bulk-purchased by cattle/ 
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poultry feed manufacturers who grind it and mix it with 
other feed articles to make cattle/poultry feed. ·Farmers 
and owners of cattle/poultry purchase it in retail, break it 
or grind it and feed them to cattle/poultry, with or without B 
additives. It is also used as boiler fuel in some areas. 
Serious research is in progress to make it fit for human 
::._, . consumption. The name, method of manufacture, uses 
and marketability are well known in trade, industrial, 
agricultural and village circles. When any reference book c 
can authenticate these facts wi

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