Mumbai:
In a ruling that may have far reaching ramifications,
the Supreme Court has held that refining of vegetable
oil, which existed as edible oil even prior to refining,
does not amount to manufacture and, hence, does not attract
excise duty that can be levied on manufacture of refined
oils.
The
Suppreme Court was disposing off a civil appeal filed
20 years ago by Shyam Oilcake, a Rajasthan-based company,
against the judgment of CEGAT (Customs, Excise and Gold
(Control) Appellate Tribunal), saying, "Neither in
the section note nor in the chapter note nor in the tariff
item do we find any indication that the process indicated
is to amount to manufacture."
The
apex court observed that that in the process of refining
as actual manufacturing does not take place, the deeming
provision cannot be brought into play in the absence of
it being specifically stated that the process amounts
to manufacture. The court added that for a deeming provision
to come into play, it must be specifically stated that
a particular process amounts to manufacture.
As
a number of companies in the past two years have committed
large investments in shifting their refining units to
areas like Kandla in Gujarat, which enjoy excise-free
status, this ruling has created tremendous interest in
the country's vegetable oil trading circles.
Excise
duty on manufacture of refined oil was withdrawn in 1996
but was re-introduced in 2003. Refiners have since then
been protesting against the levy, but the government has
remained firm.
At
present, excise duty on manufacture of refined oil is
Rs 1,000 a tonne and Rs 1,250 on vanaspati.
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