Raj Petrochem Industries Vs. Commissioner of C. Ex. and Cus. - Court Judgment

Excerpt:

.....the impurities in them, and rendering them fit for use again as such lubricating or other oil, referred to as "white oil". the question for consideration in this appeal is whether this activity amounts to manufacture. adjudicating on the notice to show cause to the appellant the commissioner held that the process resulted in the emergence of a new commodity with different use and hence amounted to manufacture.2. it is the contention of the advocate for the appellant that removal of impurities from used oil so that it can be rendered fit for use does not amount to manufacture. this contention has to be accepted in the light of the decisions of the tribunal that the appellant relies upon in support. in cce v. crescent chemical corporation -1990 (48) e.l.t.458 the tribunal held, relying upon an unreported judgment of the gujarat high court, that purification of used oil with acid and activated earth cannot by itself amounts to manufacture. similar is the ratio of the decision of the tribunal in mineral oil corporation v.cce, kanpur 1999 (34) rlt 24 that reclamation of transformer oil does not amount to manufacture.

Judgment:

1.The appellant subjected used lubricating and other mineral oils to treatment treating them with acid or alkali, and filtration through fuller's earth, thereby removing the impurities in them, and rendering them fit for use again as such lubricating or other oil, referred to as "white oil". The question for consideration in this appeal is whether this activity amounts to manufacture. Adjudicating on the notice to show cause to the appellant the Commissioner held that the process resulted in the emergence of a new commodity with different use and hence amounted to manufacture.

2. It is the contention of the advocate for the appellant that removal of impurities from used oil so that it can be rendered fit for use does not amount to manufacture. This contention has to be accepted in the light of the decisions of the Tribunal that the appellant relies upon in support. In CCE v. Crescent Chemical Corporation -1990 (48) E.L.T.458 the Tribunal held, relying upon an unreported judgment of the Gujarat High Court, that purification of used oil with acid and activated earth cannot by itself amounts to manufacture. Similar is the ratio of the decision of the Tribunal in Mineral Oil Corporation v.CCE, Kanpur 1999 (34) RLT 24 that reclamation of transformer oil does not amount to manufacture.