J.B. Solvex Industries (P) Ltd. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:

.....stated that in respect of this issue, two different high courts have given two dramatically opposite verdicts whereas the allahabad high court has observed in the case of u.p. solvent extractors' association v. union of india reported in 1989 (39) e.l.t.18 (all.) that it was not leviable to cess as rice was not oil seed and rice bran cannot be considered as a plant material but was merely a by-product of rice paddy whereas the andhra pradesh high court in the case of andhra pradesh rice bran solvent extractors association v.union of india reported in 1988 (37) e.l.t. 198 (a.p.) has held that the rice bran was a part of the plant origin of the rice seed which was undoubtedly a plant part and therefore, leviable to cess was authorised.4. he also stated there are other authorities which have taken one or the other view in the matter and since this issue is highly contentious and debatable, therefore, the appellants should not be asked to deposit the amount at this stage.5. it was also his submission that the department was also not justified in invoking the extended period of limitation under these circumstances.6. learned dr drew attention to the impugned order and reiterated the.....

Judgment:

1. These are stay applications filed with reference to the order of Commissioner of Central Excise, Chandigarh dated Nil.

2. Learned counsel stated that the main issue involved in this case is as to whether rice bran oil was leviable to Cess under the Vegetable Cess Act, 1983.

3. Learned counsel stated that in respect of this issue, two different High Courts have given two dramatically opposite verdicts Whereas the Allahabad High Court has observed in the case of U.P. Solvent Extractors' Association v. Union of India reported in 1989 (39) E.L.T.18 (All.) that it was not leviable to cess as rice was not oil seed and rice bran cannot be considered as a plant material but was merely a by-product of rice paddy whereas the Andhra Pradesh High Court in the case of Andhra Pradesh Rice Bran Solvent Extractors Association v.Union of India reported in 1988 (37) E.L.T. 198 (A.P.) has held that the rice bran was a part of the plant origin of the rice seed which was undoubtedly a plant part and therefore, leviable to cess was authorised.

4. He also stated there are other authorities which have taken one or the other view in the matter and since this issue is highly contentious and debatable, therefore, the appellants should not be asked to deposit the amount at this stage.

5. It was also his submission that the Department was also not justified in invoking the extended period of limitation under these circumstances.

6. Learned DR drew attention to the impugned order and reiterated the Department's view-point.

7. We have considered the above submissions. We observe that the learned counsel is right in pointing out that different authorities have taken different views in this matter and judgments of the Allahabad High Court and Andhra Pradesh High Court cited by CAT in this respect are dramatically opposite.

8. The Bench also recollects that recently in the matter M/s.

Jayalakshmi Cotton & Oil Products Pvt. Ltd. in appeal No. E/350/87-D, the issue involved was the same and the matter was referred to the Hon'ble President for constituting a Larger Bench.

9. In view of this position, we grant waiver of pre-deposit of the amount in question and stay its recovery during the pendency of the appeal.

10. We further direct that this matter may also be transferred to the Larger Bench to be heard by that Bench alongwith the aforesaid case.