M/S. LIBERTY OIL MILLS (P) LTD. BOMBAY versus THE COLLECTOR OF CENTRAL EXCISE BOMBAY ETC.

Citation: [1994] SUPP. 6 S.C.R. 547 · Decided: 13-12-1994 · Supreme Court of India · Bench: R.M. SAHAI · Disposal: Dismissed
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Judgment (excerpt)

MIS LIBERTY OIL MILLS (P) LTD. BOMBAY 
v. 
THE COLLECTOR OF CENTRAL EXCISE BOMBAY ETC. 
DECEMBER 13, 1994 
[R.M. SAHAI AND K.S. PARIPOORNAN, JJ.] 
Central Excises and Salt Act, 1944: First Schedule-Item 13-
'Vegetable Product'-Levy of duty-Notification granting benefit of 
concession-Interpretation of 
A 
B 
Interpretation of Statute-Fiscal statute-Interpretation of-Held C 
ambiguity should be interpreted in favour of revenue. 
Under Government Notification No. 6lnl dated 29.5.71 as 
amended by Notification No. 40n2 dated 17.3.1972 exemptiOn of excise 
duty to the extent of rupees ten per quintal was available in respect of 
vegetable product produced out of rice bran oil subject to the D 
conditions that (1) the said vegetable product was issued out from a 
factory in admixture with til oil, or with vegetable product from other 
oils, or with both; and (ii) the proportion of the said vegetable product 
was in excess of one per cent of the total vegetable product in a 
particular consignment. The appellants cleared their vegetable 
products, falling under Tariff item No. 13 of the First Schedule to the E 
Central Excises and Salt Act, 1944, at concessional rates under the said 
Notification. Subsequently, Revenue issued six demand notices to the 
appellant for recovery of the differential duty involved in clearance for 
different periods. The appellant-assessee preferred appeals before the 
Appellate Collector who set aside the demands and allowed the appeals. F 
On Revenue's appeal the Appellate Tribunal reversed the decision of 
Appellate Collector and directed revision of the demands of duty within 
a period of six months from the date of show cause notice. 
In appeal to this Court on the question whether the appellants were 
entitled to the benefit of exemption afforded by the aforesaid G 
Notification it was contended on behalf of the appellants that the 
exemption was applicable with reference to the entire quantity of 
admixture containing the vegetable products produced out of rice bran 
oil, the only other condition being that the vegetable products made 
from rice bran oil in the admixture should be more than 1 % of the total 
in any consignment. 
547 
H 
548 
SUPREME COURT REPORTS 
[1994] SUPP. 6 S.C.R 
A 
On behalf of the Revenue it was contended that the Notification has 
B 
c 
D 
E 
F 
G 
not exempted the vegetable products but only exempted indigenous rice 
bran oil to the extent it was represented in the vegetable product. 
Dismissing the appeals, this Court 
HELD: 1. The conclusion arrived at by the Tribunal is valid and 
tenable. The conclusion follows either by construing the plain language 
of the main clause alone or by construing the entire notification along 
with the conditions. No interference is called for with the decision 
rendered by the Appellate Tribunal. (553 D] 
2: The language in the Notification is fairly clear. The crucial 
words in the notification- "such vegetable product" "as is made from 
indigenous rice bran oil" from the "duty of excise is leviable thereon" 
are important. The words "as is made from the indigenous rice bran 
oil" should be understood in a meaningful manner. The related or 
synonymous words for "as is" are many. Keeping the related words of 
"as is" in mind, it appears that the .natural and proper meaning to be 
given to the enacting or main clause of the notification is, that the 
Central Government exempts such vegetable product, to the extent "it 
is made" or "as .shown to be made" or "as represented to be ma~e" or 
"as seen made", from indigenous rice bran oil. The title itself is 
"exemption to vegetable product produced out of indigenous rice bran 
oil".· It can only mean that the quantity of rice bran oil contained in the 
vegetable product is exempt. [553 A to C) 
3. The contention that exemption is available to the entire quantity 
of admixture of the vegetable product, produced out of rice bran oil the 
only condition being that the content of rice bran oil should be more 
than 1 % of the total, in any consignment, and such interpretation of 
the notification is equally possible is not tenable. Even assuming that.it 
is so, in the case of an ambiguity or doubt regarding an exemption 
provision in a fiscal statute, the ambiguity or doubt will be resolved in 
favour of the revenue and not in favour of the assessee. [553 F] 
Mis Novopan India Ltd, Hyderabad v. Collector of Central Excises 
and Customs, Hyderabad, (1994) 6 JT SC 80, referred to. 
CIVIL A
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