B.P. Jeevan Reddy, J.
1. This writ petition is directed against the order of the Government of India in a revision petition filed by the petitioner. The petitioner is Messrs. Rajendra Oil Mills and Refinery, Hyderabad. It is engaged in the manufacture of 'industrial hard oil', which is used as a raw material in the manufacture of soaps. The petitioner says that the 'industrial hard oil' is manufactured out of raw castor oil, and that the 'industrial hard oil' is popularly known as 'vegetable tallow' or 'hard lumps', but that it is not known as 'processed vegetable non-essential oil' in the market. The petitioner says that the raw castor oil is subjected to a process of clarification and then hydro-genated at a melting point over and above 45 degrees and converted into hard lumps, which are unfit for human consumption. According to the petitioner this 'industrial hard oil' or 'hard lumps', as it may be called, is not dutiable under any of the provisions of the Central Excises and Salt Act, 1944. The authorities, however, took a contrary view and sought to levy the duty under tariff item No. 12. This is the controversy in the writ petition.
2. The proceedings commenced with the issuance of a show cause notice issued by the Collector, Central Excise, dated 3rd February, 1976 stating that inasmuch as the petitioner has cleared during the period 21st February, 1975 to 25th October, 1975 certain quantity of hardened castor oil without payment of Central Excise duty, he should show cause why duty at the rate of Rs. 100 per M. T. should not be demanded under tariff item No. 12 read with Rules 10 and 9(2) in respect of the said hardened castor oil manufactured and cleared by it. The petitioner submitted an explanation to the show cause notice. According to him hardened castor oil is not dutiable either under item No. 12 or item No. 13. The Collector, Central Excise, by his order dated 16th June, 1976 overruled the objections of the petitioner and held that since the process of manufacture of the hardened castor oil involves the manufacture of processed V. N. E. oil, what is called the 'clarified oil' --duty is leviable on that clarified oil under item No. 12. The petitioner filed an appeal before the Central Board of Excise and Customs inter alia contending that while the show cause notice proposed to levy duty upon the hardened oil, the order under appeal says that duty is leviable on the intermediate product, namely, 'clarified oil'. It was contended that clarified oil is not dutiable, and further that clarified oil is not goods since it is not marketable. Another contention raised was that the clarified oil, which is vegetable non-essential oil, cannot be said to be a processed vegetable non-essential oil and is therefore exempt from duty by virtue of Notification No. 33/63 dated 1st March, 1963. The appellate authority negatived all these contentions. It held that the process employed by the petitioner for obtaining clarified oil is in effect and in truth 'bleaching' referred to in the aforesaid notification. It also held that the clarified oil is a marketable commodity and therefore goods. With respect to the complaint as to the shift in ground of levy of duty, the appellate authority held that there was no violation of principles of natural justice and that even if there is any omission, it is merely technical. It held that the show cause notice clearly called upon the petitioner to show cause why the oil manufactured by him should not be held liable to duty and that in any event there was no prejudice to the petitioner on account of technical defect, if any, in the show cause notice. On revision the Government adopted the same reasoning and dismissed the revision.
3. In this writ petition Mr. P. Ramachandra Reddy, the learned Counsel for the petitioner, raised three contentions.
1. That the clarified oil is not a 'processed vegetable non-essential oil' within the meaning of exemption Notification No. 33/63 and (is) therefore entitled to exemption.
2. That the clarified oil is not a marketable commodity and therefore not goods produced or manufactured and therefore no levy can be made.
3. In any event under Clause (b) of Notification No. 33/63, clarified oil is entitled to exemption because it is used in the manufacture of soaps falling under tariff item No. 15.
4. We shall deal with the second contention of the learned Counsel first. Both the appellate and revisional authorities have clearly held that clarified oil is a marketable commodity and therefore it constitutes goods attracting the duty under the Act. We see no reason or ground to depart from this finding, nor any material has been placed before us that the Clarified oil is not a marketable commodity. The second contention of the learned Counsel is accordingly rejected.
5. For a proper consideration of the first and third contentions urged by the learned Counsel, it is necessary to read the exemption notification being Notification No. 33/63 dated 1st March, 1963. It reads as follows:
Exemption to certain unprocessed and processed V. N. E. Oils:--In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts the following vegetable non-essential oils, falling under item No. 12 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from the whole of the duty of excise leviable thereon--
(a) all sorts of vegetable non-essential oils, other than processed vegetable non-essential oils;
(b) vegetable non-essential oils, falling under item No. 12 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), whether produced in the factory of production of the excisable goods specified below or elsewhere, if used after it is processed in the manufacture of--
(i) goods falling under item Nos. 13, 14 and 15 of the First Schedule to the Central Excises and Salt Act, 1944; and
(ii) artificial or synthetic resins falling under item No. 15A of the said Schedule:
Provided that, in respect of the vegetable non-essential oils produced elsewhere than in the factory of production of the said excisable goods, the procedure set out in Rule 56A of the Central Excise Rules, 1944, is followed;
Provided further that no such exemption shall be allowed in respect of vegetable non-essential oils used in the manufacture of finished excisable goods if such finished excisable goods produced by the manufacturer are exempted from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty.
Explanation:--For the purpose of this notification 'processed vegetable non-essential oil' means a vegetable non-essential oil which has undergone, subsequent to its extraction, any one or more of the following processes, namely:
(i) Treatment with alkali or acid;
2. Notification No. 50/63 shall come into force on 1st March, 1963. (Notification No. 33/63-C. E. dated 1st March, 1963 as amended by Notification
No. 50/63-C. E., dated 7th March, 1963;
No. 14/64-C. E., dated 15th February, 1964;
No. 110/65-C. E., dated 16th July, 1965
and No. 181/71-C. E., dated 9th October, 1971.)
6. The first contention of Mr. P. Ramachandra Reddy is that the clarified oil, which is now held leviable to duty, is not a processed vegetable non-essential oil. While it is not disputed that it is a vegetable non-essential oil, the dispute is whether it is processed or not. Upon this question again both the appellate and revisional authorities have held, on a consideration of the process employed by the petitioner for obtaining the clarified oil, that it is in effect and in truth a bleaching process. Now the meaning and expression of the words 'processed vegetable non-essential oil' is mentioned in the explanation contained in the notification, according to which 'bleaching' is one form of processing. In this case it is held that the raw castor oil undergoes bleaching by treatment with activated bleaching earth and carbon and that the mere fact that the processing is not done according to B.S.S. specifications is no ground for saying that it is not a process of bleaching. May be the processing is on a limited scale, but, it has been held, it is bleaching all right. This is again a concurrent finding and we see no reason to depart from the said finding. If so, it must be held that the clarified oil produced/manufactured by the petitioner is a processed vegetable non-essential oil and therefore it cannot claim exemption under the aforesaid notification.
7. Now coming to the third contention, the submission is that inasmuch as the clarified oil is used in the manufacture of soaps falling under tariff item No. 15, it is entitled to exemption under Clause (b) of the aforesaid notification. Firstly this contention was not urged before any of the authorities below. Secondly it may be noticed that the clarified oil is not used directly in the manufacture of soaps. From the clarified oil, the hardened oil is obtained and then the hardened oil is used in the manufacture of soaps. Hardened oil itself is a marketable commodity. It is open to the petitioner to sell it as hardened oil, without using it for manufacturing soaps. In such a situation it cannot be said that clarified oil is used in the manufacture of soaps. This is the view taken by the Bombay High Court in Indian Vegetable Products Limited v. Union of India 1980 ELT 704 and we agree with that view.
8. For the above reasons, the writ petition fails and is accordingly dismissed with costs. The petitioner is granted two months' time for paying the excise duty due in this behalf.
9. The learned Counsel for the petitioner makes an oral request for leave to appeal to Supreme Court under Article 133 of the Constitution of India. We are however not persuaded that this case involves a substantial question of law of general importance, which, needs to be decided by the Supreme Court. The oral request is accordingly rejected.