M/S. SHYAM OIL CAKE LTD. versus COLLECTOR OF CENTRAL EXCISE, JAIPUR

Citation: [2004] SUPP. 6 S.C.R. 346 · Decided: 23-11-2004 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
MIS. SHYAM OIL CAKE LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE, JAIPUR 
NOVEMBER 23, 2004 
[S.N. V ARIA VA, DR. AR. LAKSHMANAN 
AND S.H. KAPADIA, JJ.] 
Central Excises and Salt Act, 1944 : 
C 
S. l(j)-Schedule-Tariff Item 1503.10-Process "amounting to 
manufacture "-Process of refining edible vegetable oil-Held, neither in 
the Section nor in the Chapter Note nor in the Tariff Item has it been 
mentioned that the process indicated is to amount to manufacture-
Therefore, the deeming provision cannot be brought into play-There is 
D no manufacture and the refined oil is not excisable. 
E 
F 
Appellant-assessee was selling refined edible oil. The assessee 
purchased edible vegetable oil from the market, excise duty whereon 
was paid by the manufacturer, and subjected it to certain refining 
processes. In the classification list, the assessee mentioned that since no 
manufacturing activity was involved, no duty was payable on clearance 
of the goods. The Revenue did not accept the plea and asked the assessee 
to pay excise duty in respect of the goods cleared prior to March 1986 
and also issued show cause notice for the period after March 1986. The 
appeals filed by the assessee were dismissed by the Collector (Appeals) 
holding that the product was classifiable under sub-heading 1503.10 and 
duty was payable on the same. The Customs, Excise and Gold (Control) 
Appellate Tribunal upheld the order. Aggrieved, the assessee filed the 
present appeals. 
On the question : whether processing of the edible vegetable oil 
G purchased by the assessee results in manufacture. 
Allowing the appeals, the Court 
HELD : 1. Prior to the 1986 amendment, under the definition of 
H 'manufacture' as provided in section 2(t) of the Central Excises and Salt 
346 
SHY AM OIL CAKE LTD. v. C.C.E., JAIPUR 
347 
Act, 1944, apart from actual manufacture, certain processes were A 
considered to be manufacture. This did not include the process of refining 
edible oil. Therefore, this process could not be taken to amount to 
manufacture. Thus, for the period prior to 1986 the demand could not 
have been sustained in any event. 1351-B-C; 352-E-F; 355-G-HJ 
2.1. With effect from 28.2.1986, Section 2(f) has been amended 
enlarging the scope of 'manufacture' by roping in processes which may or 
may not strictly amount to manufacture provided those processes are 
specified in the Section or Chapter notes of the Tariff Schedule or even in 
the Tariff Item, as amounting to manufacture. The language of the 
amended Section 2(t) indicates that what is required is not just specification 
of the goods but a specification of the process in relation to the said goods 
and a declaration that the same amounts to manufacture. (353-B-C-D] 
B 
c 
2.2. Merely setting out a process in the Tariff Entry would not be 
sufficient. For a deeming provision to come into play it must be specifically 
stated that a particular process amounts to manufacture. In the absence D 
of it being so specified the commodity would not become excisable 
merely because a separate Tariffltem exists in respect of that commodity. 
(355-D-E-F] 
Mis. Tungabhadra Industries Ltd. v. The Commercial Tax Officer, 
Kurnool, [1961) 2 SCR 14; Commissioner of Central Excise, Chandigarh-
] v. Markfed Vanaspati & Allied Industries, (2003) 153 ELT 491 SC; 
Collector of Central Excise v. Technoweld Industries, (2003) 155 ELT 209 
SC and Aman Marble Industries Pvt. Ltd. v. Collector of Central Exicse, 
Jaipur, (2003) 157 EL T 393 SC, relied on. 
Met/ex (I) Pvt. Ltd. v. Commissioner of Central Excise, New Delhi, 
(2004) 165 EL T 129 SC, referred to. 
2.3. In the instant case, neither in the Section nor in the Chapter Note 
nor in the Tariff Item is there any indication that the process indicated is 
E 
F 
to amount to manufacture. To start with, the product was edible vegetable G 
oil. Even after the refining, it remains edible vegetable oil. As actual 
manufacture has not taken place, the deeming provision cannot be brought 
into play in the absence of it being specifically stated that the process 
amounts to manufacture. It is accordingly held that there is no manufacture 
and the refined oil is not excisable. [355-F-G; 356-A-BJ 
H 
348 
SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R. 
A 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1287-1289 
of 1999. 
From the Judgment and Order dated 16.11.98 of the Central Excise 
C't:i"stoms and Gold (Control) Appellate Tribunal, New Delhi in A. No. El 
B 4367/91-C, E/196

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