IVP LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The question which falls for determination in this petition filed under Article 226 of the Constitution of India is whether hardened or hydrogenated oils having melting point of 41 Degree C are to be classified under Tariff Items Nos. 12, 13 or residuary Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944. The question comes up for consideration in the following circumstances.

(2.) The petitioner No. 1 is a Joint Stock Company governed by the provisions of the Companies Act and are running a factory situated at Ghodapdeo, Bombay, manufacturing vegetable products, such as vegetable oils, hardened technical oils, etc. The vegetable non-essential oil is hardened to a melting point higher than 41 Degree C and the oils are not capable of human consumption but are purely meant for industrial purposes. The hydrogenated oil is used within the factory for internal consumption in the manufacture of soap. Oils or fats consist predominantly of glycerine esters of fatty acids. The word "oil" is used for trigylcerides that are liquid at ambient temperatures. Apart from the physical appearance, there is no distinction between oil and hydrogenated oil and the hydrogenated oil still retains the characteristics of oil even after hardening. Prior to April 1978, petitioner No. 1 was classifying the hardened vegetable oil for the purpose of levy of excise duty as falling under Tariff Item No. 13. Tariff Item No. 13 reads as under :

(3.) Accordingly, on April 22, 1978, the petitioners submitted a revised classification list for the hardened vegetable oil before the Assistant Collector of Central Excise classifying the article as excisable under Item No. 12. The Assistant Collector of Central Excise by order dated May 4, 1978 rejected the said classification list on the ground that no product would fall under Tariff Item No. 13 if the contention of the petitioners is accepted. The Assistant Collector of Central Excise also held that as the petitioners have classified the product under Tariff Item No. 13 for a considerable period, it is not possible to classify it under Tariff Item No. 12. The petitioners sought clearance on payment of duty under protest and preferred an appeal before the Appellate Collector of Central Excise. The Appellate Collector of Central Excise allowed the appeal by order dated March 20, 1980 holding that the product was classifiable under Tariff Item No. 12. The Appellate Collector placed strong reliance upon the decision of the Supreme Court in the case of Tungabhadra Industrial Ltd. V/s. the Commercial Tax Officer reported in A.I.R. 1961 Supreme Court 412 to record a finding that hardened vegetable oil does not cease to be vegetable oil by the process of hardening. The Appellate Collector dis-agreed with the order of predecessor holding that the product is classifiable neither under Tariff Item No. 12, nor under Tariff Item No. 13, but under residuary Item No. 68 which refers to "goods not elsewhere specified."