Jyoti Balasundaram, Member (J)

1. The appellants herein have challenged the levy of cess on cotton seed oils produced by them by the solvent extraction and expeller methods. As all the appeals involve a common issue they were heard together and are being disposed of by a common order. The dispute regarding levy of cess on oil extracted by solvent extraction process is no longer alive in view of the judgment of the High Court of Bombay in the case of Bhasir Oil Mills v. Union of India reported in MANU/MH/0185/1987 : 1990 (47) ELT 305 wherein the Court has held that oil extracted from oil cakes only by solvent extraction process is not "vegetable oil" but a distinct commercial commodity and, therefore, no cess can be levied upon the same under Section 3 of the Cess Act as it is not covered by the definition of the expression "Vegetable Oil" given in Section 3(h) of the Board Act. Therefore, the only issue which survives for determination is whether cotton seed oils extracted by expeller method is a "vegetable oil".

2. The appellants' company is a cotton seed processing complex having an oil mill, solvent extraction plant and refinery which produces cotton seed oils by expeller method and solvent extraction method. The Vegetable Oils Cess Act, 1983 (Act No. 30/83) was brought into force from 1-1-1984. It provided for the levy and collection of cess on vegetable oils for the development of the oil seeds industries and vegetable oil industries and matters connected therewith. Section 3 which is the charging section reads as follows :

"There shall be levied and collected by way of cess for the purposes of the National Oilseeds and Vegetable Oils Development Board Act, 1983 a duty of excise on vegetable oils produced in any mill in India at such rate not exceeding five rupees per quintal of vegetable oil, as the Central Government may from time to time, specify by notification in the Official Gazette."

3. Section 2 of the Act which defines certain terms used in the Act does not define Vegetable Oil. Sub-section (2) of Section 2 provides that the words and expressions used but not defined in the Act and defined in the National Oilseeds and Vegetable Oils Development Board Act, 1983 (Act 29 of 1983) shall have the meanings respectively assigned to them in that Act. The expression "Vegetable Oil" has been defined in Section 3(h) of Act 29 of 1983 which is as follows:

"Vegetable oil means any oil produced from oilseeds, or any other oil bearing material of plant origin, and containing glycerides but does not include any such vegetable oil which has been subjected to any processing subsequent to the recovery of oil".

4. The contention of the appellants is that according to the definition of the expression "Vegetable Oil", oil produced shall be from (i) oil seeds (ii) any other oil bearing material of plant origin. The words "but does not include any such vegetable oil which has been subjected to any processing subsequent to the recovery of oil" are conjunctive to the main part of the definition and, therefore, the definition of vegetable oil expressly provides for statutory exclusion or exemption of vegetable oil recovered but subjected to any processing subsequent to recovery and thus finally produced, from the liability to cess. The learned Counsel seeks to make a distinction between oils recovered and oils produced and, therefore, contends that cess is not payable on cotton-seed crude oil which is not edible in crude form, as Section 3 of the Vegetable Oil Cess Act levies cess only on vegetable oils produced and not vegetable oils recovered. This contention cannot be accepted as the National Oil Seeds and Vegetable Oils Development Board Act, 1983 covers all vegetable oils produced from oil seeds or any other oil bearing material of plant origin and is not restricted to edible vegetable oil. There is no scope for interpretation of the words "produced" and "recovered" so as to exclude from the purview of the Act, oil which is not ready f