UNION OF INDIA UNION OF INDIA UNION OF INDIA HINDUSTAN LEVER LIMITED Vs. DELHI CLOTH AND GENERAL MILLS COMPANY LIMITED :GANESH FLOUR MILLS CO LIMITED DELHI:MODI SUGAR MILLS:DELHI CLOTH AND GENERAL MILLS COMPANY LIMITED

JUDGEMENT

(1.) These three appeals are against the orders of the Punjab High Court allowing three petitions under Art. 226 of the Constitution.

(2.) The facts alleged in the three separate petitions filed by the three petitioners (the respondents herein), the manufacturers of Vanaspati, are practically the same. It is said that for the purpose of manufacturing Vanaspati the petitioners purchased groundnut and til oil from the open market or directly from the manufacturers of such oil. The oils thus purchased are subjected to different processes in order to turn them into Vanaspati. It is their case that the only finished product they manufacture from the raw materials thus purchased is Vanaspati which is liable to excise duty as a vegetable product. They contend that at no stage do they produce any new product which can come within the items described in the Schedule as "vegetable non-essential oils all sorts, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power" Accordingly, it is said, the demand for excise duty on the ground that they produce from the raw oils purchased a product which is liable to duty under item 23 of the Schedule (now item 12) is illegal.

(3.) In resisting these petitions the Union of India contended, in substance, that in the course of the manufacture of Vanaspati, the vegetable product from raw groundout and til oil, the petitioners bring into existence at one stage, after carrying out some processes with the aid of power, what is known to the market as "refined oil". This "refined oil" falls within the description of "vegetable non-essential oils, all sorts, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power," and so is liable to excise duty. The affidavit files by Mr. P. S. Krishnan, Chief Chemist, Central Revenue, Central Laboratory, Government of India, in support of this contention of the appellant, describes the process by which raw oil is manufactured into Vanaspati thus:-