1. The condonation of delay applications are allowed, inasmuch as the original appeal was filed in time and it is only the supplementary appeals, which were filed subsequently on an objection raised by the Registry. As such, after allowing the COD applications, we take up all the appeals together for disposal.
2. The appellants are engaged in the manufacture of vegetable products falling under Chapter 15 of the Central Excise Tariff Act, 1985. As per the provisions of Notification No. 115/86-CE, dated 1-3-86, vegetable products falling uner chapter 15 were granted exemption subject to increased use of specified minor oils, subject to fulfilment of conditions stated therein. However, the appellants did not avail the exemption under the said Notification during the period March 86 to May 86 and cleared the vegetable products on payment of duty. Thereafter, they filed a refund claim, which was sanctioned by the original adjudicating authority.
3. Subsequently, show cause notice was issued to the appellants proposing recovery of the refund granted on the ground that they did not maintain account showing quantity of cotton seeds oil utilized in individual charge taken for hydrogenation of vegetable products, as a result of which the information regarding percentage of cotton seed oil used in the individual charge was not available, as also on the ground that they did not file specific option for claiming of refund on monthly basis as provided in explanation 4 of the notification. The Assistant Commissioner, while denying the refund claim confirmed the demand of Rs. 16,61,822.44. The appeal against the same did not succeed before the Commissioner (Appeals). Hence the present appeal.
4. We have considered the submissions made by Shri S.P. Sheth, Advocate, appearing for the appellants and Shri R.B. Pardeshi, Id. JDR appearing for the Revenue.
5. In terms of Notification No. 115/86-CX, vegetable products falling under sub-heading 1504.00 were exempted if the same were made from indigenous cotton seed oil, any one or more of the other indigenous minor oils specified in the table annexed to the notification or a mixture of any one or more of the aforesaid oils with any other oils.
6. The amount of exemption was to be calculated at the rate specified in the notification which provided different rates depending upon the use of specified minor oils for each additional percentage point of increase. Explanation attached to the said notification provided the method for arriving at the percentage of cotton seed oil, which was to be calculated with reference to the weight of such oil and the total weight of mixture of oil. For better appreciation, we reproduce below the explanations 3 and 4 of the notifications :- 3. The percentage of cotton seed oil or specified minor oils used in the manufacture of the vegetable product, shall be calculated with reference to the weight of such oils and the total weight of the mixture of oils immeditely before such mixture is subjected to the process of hydrogenation for conversion into the said vegetable product: 4. The amount of exemption shall, at the option of the manufacture, be calculated either on the basis of individual charge or on monthly basis.
7. As is clear from the reading of the above condition of the notification, the percentage of cotton seed oil or specified oil was to be calculated with reference to the weight of such oils and the total weight of the mixture oils immediately before such mixture is subjected to the process of hydrogenation (emphasis provided). As such, the percentage use of the specified minor oil was required to be ascertained for the purpose of exemption on charge wise basis i.e. the percentage of such oil as compared to the total weight of the mixture immediately before hydrogenation. Admittedly, the appellants had not maintained any charge wise account of cotton seed oil as was required under explanation 3 to the notification. The notification envisaged the exemption of vegetable products for each additional percentage of increase in the use of cotton seed oil for manufacture of vegetable products in the excess of 15% of the total oil subject to the ceiling of Rs. 1,000/- MT of such vegetable product.Wipro Ltd. v. UOI, the Hon'ble Supreme Court while examining an identical issue in respect of the Notification dated 1-3-87 has held that a concessional benefit in respect of vegetable products using specified minor oil can be claimed under the Notification.only in the manner prescribed therein and on fulfilment of the condition specified in the notification for this purpose. Accordingly, the Hon'ble Supreme Court has held that inasmuch as the credit was not taken by the manufacturer on the date of which the oil had been so hydrogenated, expressed requirement prescribed in the notification for claiming the credit was not fulfilled and the non-compliance of this essential condition itself is sufficient to sustain the dismissal of the appellant's claim on merits. In the present case also we find that condition 3 of the notification for arriving at a percentage of cotton seeds oil or specified minor oil used immediately before hydrogenation has not been satisfied. In addition, the appellant has also not exercised the option for calculation of such exemption either on monthly basis or on new charge basis as envisaged in explanation 4 to the notification. For all these reasons, we are of the view that the appellants were not entitled to refund claim already sanctioned to them and the impugned orders confirming recovery of the same are required to be upheld.9. Examined from the other angle also, the refund claim was not available to the appellants inasmuch as the duty was paid by them in accordance with the approved classification list. No such claim was made in the classification list and as such, there was no challenge by way of appeal to the approval of the classification list. The duty burden having been discharged in accordance with the approved classification list, the subsequent refund claim without any challenge to such approval was not admissible, in view of the law laid down by the Hon'ble Supreme Court and in the case of Flock India, .
10. For the reasons as recorded above, we do not find any merit in the appeal and reject the same.