of Central Excise. Coimbatore Vs. Protein Products of India Ltd.  INSC 359 (28 November 1988)
S. Rangnathan, S.
1989 AIR 627 1988 SCR Supl. (3) 993 1989 SCC Supl. (1) 729 JT 1988 (4) 517 1988
Excises and Salt Act, 1944 Section 35L and Notification dated June 30, 1979-Item 'crushed bones and bone
products'--'Ossein and gelatine'--Whether 'hone products'--Whether exempt from
respondent-company manufactures ossein and gelatine from bones. Ossein is
prepared from bones by dissolving the mineral part of the bones with phosphoric
acid. From the ossein so obtained, gelatine is obtained by treating the same
further with an alkali. The company claimed exemption from excise duty under a
notification of the Government of India dated 30.6.1979 wherein crushed bones
and bone products were added as an item exempt from payment of excise duty.
respondent appealed to the Appellate 'Tribunal which held that the products
manufactured by the respondent company are 'bone products', and the company is
entitled to the benefit of the notification, treating it as a 'bone product'.
appellant-Revenue, therefore, filed an appeal before this Court under section
35L of the Central Excises & Salt Act,1944 and contended that the words
bone products' should be read along with the words crushed bones, and ossein
and gelatine cannot be described as bone products because they could also be
obtained from raw material other than bones, such as pig skin and hides.
the appeal. the Court,
The expression 'bone products merely means anything produced or obtained from
bones. Whether such derivation is by a simple physical process or by a chemical
reaction would seem to make no difference to the end product. [996F] The
products in question ossein are derived merely by the extraction of the mineral
parts of the bones. Gelatine is obtained by a further treatment, with an
alkali, of the ossein manufactured from the bones. It is the collageon PG NO
993 PG NO 994 which forms the organic content of the bones that is utilised in
the manufacture of ossein and gelatine. [996E] Collector of Customs, Bombay v. Swastic Woollen (P) Ltd.
products' does not mean that the products must contain visible pieces of bones
and that the expression is limited only to the primary products obtained on
crushing of bones such as bone sinew, bone grist, and bone meal. [995C] The ossein
and gelatine manufactured by the respondent can, without straining the
expression used in the notification, be described as bone products. [996GI
& CIVIL APPEALLATE JURISDICTION: Civil Appeal No. 1420 of 1988.
the Order dated 13.11.1987 of the Customs, Excise and Gold (Control) Appellate
Tribunal, New Delhi in Appeal No. 1441/83-C in Order
Solicitor General, H. Sharma, Mrs. Sushma Suri for the Appellant.
J. Sorabjee, A.N. Haksar. R. Narain, D.N Misra and P.K. Ram for the Respondent.
Judgment of the Court was delivered by RANGANATHAN, J. A very short question is
involved in this appeal under section 35L of the Central Excises & Salt
respondent, M/s Protein Products of lndia, manufactures ossein and gelatine. It
claimed exemption from excise duty under ; notification of the Government of
India dated 30.6.1979. By this notification one more item was added to a list
of items exempted from payment of excise duty under an earlier notification
dated 1.3.75. This item reads as follows:
bones and bone products.' The respondent company manufactures the above
products from bones. Ossein is prepared from bones by dissolving the PG NO 995
mineral part of the bones with phosphoric acid. From the ossein so obtained, gelatine
is obtained by treating the same further with an alkali. Although gelatine can
also be manufactured from other sources such as pig skin and hides, it is
common ground that the respondent company was manufacturing gelatine only from
Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) has taken the
view that the products manufactured by the respondent company are 'bone
products' and that the company is entitled to the benefit of the notification
dated 30.6.79 referred to earlier. The Tribunal pointed out that, admittedly,
the raw material for the two products in question is crushed bones. It accepted
the argument urged on behalf of the respondent company that the word 'product'
only directed attention to the principal raw material from which the product in
question is derived. Bone products' does not mean that the products must
contain visible pieces of bones and that the expression is limited only to the
primary products obtained on crushing of bones such as bone sinew, bone grist,
and bone meal. Reference was made to the description of gelatine in the Indian
Standard Specification as a "purified product obtained by partial
hydrolysis of collagen, derived from skin, white connective tissues and bones
of animals" and to a definition of gelatine in 'Chemical Process
Industries' as "derived by hydrolysis from collagen--the white fibres of
the connective tissues of the animal body. particularly in the skin (Corium),
bones (Ossein) and tendons." The Tribunal also referred to an earlier
order wherein di-calcium phosphate.
by treating with acid the mineral portions seperated from crushed bones, had
been held entitled to the benefit of the same notification, treating it 'bone
learned Solicitor General, appearing on behalf of the appellant, submitted that
the view taken by the Tribunal is erroneous. According to him, the words 'bone
products' should he read. along with words 'crushed bones' and, therefore, the
exemption under the notification is only limited to primary products obtained
on crushing of bones such as bone sinew, bone grist and bone meal. He submitted
that ossein and gelatine cannot be described as hone products because they
could also be obtained from raw material other than bones, such as pig-skin and
hides. What is essential, according to him. is to consider whether the products
in question retain the principal characteristics and physical properties of
crushed bones. In other words, the argument appears to be that only products
obtained by a PG NO 996 physical processing of bones could be described as bone
products but not products obtained by treating bones with chemicals or acids.
no reason to limit the availability of the exemption under the notification in
the manner contended for on behalf of the appellant. The terms of the
notification only refer to two items--crushed bones and bone products and there
is no scope for applying any rule of ejusdem generis as contended for by the
learned Solicitor General.
is also no justification for importing any limitation as to the nature of the
products that are entitled to exemption. We see no logic or principle in
holding that only products obtained by a physical treatment of bones such as
crushing or powdering would be entitled to exemption and not products obtained
by chemical treatment. It is true that gelatine may be produced not merely from
bones but also other things such as the skin and tissues of animals. But, as
already mentioned, it is not in dispute that only bones are the raw material
from which the products manufactured by the respondent company are derived. It
is not the case of the appellant that in the manufacture of gelatine or ossein,
other raw materials are also used to such an extent as to completely overshadow
or render insignificant the utilisation of bones in the process.
products in question are derived merely by the extraction of the mineral parts
of the bones. Gelatine is obtained by a further treatment, with an alkali, of
the ossein manufactured from the bones. It is the collagen which forms the organic
content of the bones that is utilised in the manufacture of ossein and gelatine.
The word 'product' is defined in Webster's Comprehensive Dictionary as
"anything produced or obtained as a result of some operation or
work". The expression 'bone products' therefore merely means anything
produced or obtained from bones.
such derivation is by a simple physical process or by a chemical reaction would
seem to make no difference to the end product. Buttermilk, for instance does
not cease to be a milk product merely because a chemical process is involved in
the transformation. The ossein and gelatine manufactured by the respondent can,
without straining the expression used in the notification, he described as bone
products. We are, therefore, in agreement with the view taken by the tribunal
that the products manufactured by the respondent company are entitled to the
exemption under the notification dated 30.6.79.
also here usefully reiterate the observations made by us in Collector of
Customs, Bombay v. Swastic Woollen (P) Ltd. & Ors., J.T. 1988 3 S.C. 558
with regard PG NO 997 to the parameters of interference by this Court in an
appeal from the CEGAT. That case concerned the meaning of the expression
"wool waste" and, though those observations were made in the context
of S. 130E of the Customs Act, 1962, they are of equal application the present
context as well.
the new scheme of things, the Tribunal have been entrusted with the authority
and the jurisdiction to decide the questions involving determination of the
rate of duty of excise or to the value of goods for purposes of assessment.
appeal has been provided to this Court to over-see that the subordinate
Tribunals act within the law. Merely because another view might be possible by
a competent; Court of law is no ground for interference under section t30E of
the Act though in relation to the rate of duty of customs or to the value of
goods for purposes of assessment, the amplitude of appeal is unlimited. But
because the jurisdiction is unlimited, there is inherent limitation imposed in
such appeals. The Tribunal has not deviated from the path of correct principle
and has considered all the relevant factors. If the Tribunal has acted bona
fide with natural justice by a speaking order, in our opinion, even if superior
Court feels that another view is possible. that is no ground for substitution
of that view in exercise of power under clause (b) of section 130E of the
Act.'' In the present case the Tribunal has taken into consideration all
relevant factors and committed no error of principle or law.
assuming that the terms of the exemption notification can also lend themselves
to a narrower construction which may commend itself to another Tribunal or
Court that alone can be no ground to interfere with the conclusion reached by
therefore see no reason to entertain this appeal which will stand dismissed.