The Hindu Business Line : Refining of edible oil does not attract excise duty: SC

REFINING of vegetable oil, which was 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 Supreme Court has held.

Disposing of a civil appeal by Shyam Oilcake Ltd, a Rajasthan-based company, against the judgment of CEGAT (Customs, Excise and Gold (Control) Appellate Tribunal), the court said: "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."

To start with, the product is edible vegetable oil. Even after refining, it remains edible vegetable oil.

As actual manufacturing 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, the court observed, adding that, for a deeming provision to come into play, it must be specifically stated that a particular process amounts to manufacture.

The judgment by a three-judge bench of the apex court, coming 20 years after an appeal was filed with the Rajasthan High Court against the Collector of Central Excise, has created tremendous interest in the country's vegetable oil trading circles.

Excise duty on manufacture of refined oil, which was withdrawn in 1996, was re-introduced in 2003. Refiners have since then been protesting against the levy, but the Government has stood its ground.

Currently, excise duty on manufacture of refined oil is Rs 1,000 a tonne and Rs 1,250 on vanaspati.

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