M/S VINAY SOLVENT EXTRACTION INDUSTRIES PVT. LTD. versus COMMISSIONER OF CENTRAL EXCISE, GUJARAT

Citation: [2005] 3 S.C.R. 687 · Decided: 20-04-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Dismissed

Judgment (excerpt)

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M/S VINAY SOLVENT EXTRACTION INDUSTRIES PVT. LTD. 
A 
v. 
COMMISSIONER OF CENTRAL EXCISE, GUJARAT 
APRIL 20, 2005 
(S.N. VARIA VA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.] 
B 
Central Excises and Salt Act, 1944 : 
Exemption Notification No.262186-CE dated 24.4.1986-Eligibility 
under-Appellants undertaking job work of manufacturing processed vegetable C 
oil on behalf of supplier of oil cakes-Certificate by the Deputy Director of 
Vanaspati required under Clause (iii) of the Notification not available with 
the appellants-Held: Appellants not entitled to the benefit of Notification--
Even supplier of oil cakes not entitled to the benefit as it did not have a 
licence under the Act-Central Excise Tariff Act, 1985-Heading 1503.10. 
D 
Appellants had been manufacturing processed fixed vegetable oil on job 
work basis for Vijay Oil Mill out of oil cakes supplied by them. They filed 
classification list classifying the product under Central Excise Item No. 1503.10 
and claimed benefit of Notification No.262/86-CE. Department issued show 
cause notice on the appellants denying the benefit of the said Notification as E 
they had not produced certificate as required under Clause (iii) of the said 
Notification. 
The appellant then produced requisite certificate from the Directorate 
of Vanaspati, to the effect that vegetable oil was manufactured by Vijay Oil 
Mill, and it had been manufactured from fixed vegetable oil extracted by F 
solvent method. Assistant Collector dropped the proceedings. Collector 
(Appeal) allowed the department's appeal. Appellants were unsuccessful in 
their appeal before the Tribunal Hence the present appeal 
Dismissing the appeal, the Court 
HELD : 1. The Tribunal was right in holding that the appellants were 
not entitled to benefit of Notification No. 262/86-CE. Admittedly, the 
Appellants are the manufacturers. They are maintaining the record and 
clearing the goods: Under Clause (iii), it is the Appellants who have to produce 
687 
G 
H 
688 
SUPREME COURT REPORTS 
[2005] 3 S.C.R. 
A the required certificate which must necessarily show that the processed fixed 
vegetable oil manufactured by the Appellants was manufactured from fixed 
vegetable oils extracted by solvent extraction method. To get such a certificate 
the Appellants would have to be registered with the Directorate ofVansapati, 
Vegetable Oils and Fats, which admittedly they are not Thereafter, Appellants 
B produced certificates certifying that Vijay Oil Mills had manufactured such 
oil, but as the Appellants are the manufacturer, such a certificate was of no 
help. (693-C-E) 
2. Vijay Oil Mills would also not be. entitled to the benefit of the 
Notification as they did not have a licence under the Central Excise Act and 
C had not complied with any of the formalities under the Central Excise Act 
More importantly they were not paying any excise duty. A party who 
admittedly is not paying excise duty cannot claim exemption from duty. 
(695-C-D] 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2523-2529 
D of2000. 
From the Judgment and Order dated 18.11.99 of the Central Excise, 
Customs and Gold (Control) Appellate Tribunal, New Delhi in F.O .. Nos. 
1024-1030/99-C in A. Nos. E/851-857 of 1991-C. 
V. Lakshmikumaran, R.K. Hasija, Alok Yadav and V. Balachandran 
E with him for the Appellant. 
F 
G 
T.S. Doabia, Manish Sharma and P. Parmeswaran with him for the 
Respondent. 
The Judgment of the Court was delivered by 
S.N. V ARIA VA, J. These Appeals are filed against an Order dated 
18th November, 1999 of the Customs, Excise and Gold (Control) Appellate 
Tribunal (CEGA T). 
Briefly stated the facts are as follows. 
On 26th of July 1988 one Vijay Oil Mill having its address at Majevadi 
Gate, Junagadh, addressed a letter to the Superintendent of Central Excise, 
Junagadh, wherein it was mentioned that they had entered into a lease 
agreement with the Appellants. It was mentioned that Vijay Oil Mill was 
supplying oil cakes to the factory of the Appellants and that the Appellants, 
H who are holding a valid . Central Excise Licence, would be undertaking 
VINA Y SOLVENT EXTRACTION INDUSTRIES PVT. LTD. v. C.C.E. [VARIAVA, J.] 689 
manufacturing activities for and on their behalf, i.e., or. behalf of Vijay Oil A 
Mill. The letter mentioned that the Vijay Oil Mill was accordingly filing a 
declaration under Notification No. 305/77 dated 5th November 1977. By the 
letter Vijay Oil Mill applied for exemption from licencing control and 

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