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PETITIONER: COLLECTOR OF CENTRAL EXCISE. COIMBATORE

       Vs.

RESPONDENT: PROTEIN PRODUCTS OF INDIA LTD.

DATE OF JUDGMENT28/11/1988

BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. MUKHARJI, SABYASACHI (J)

CITATION:  1989 AIR  627            1988 SCR  Supl. (3) 993  1989 SCC  Supl.  (1) 729 JT 1988 (4)   517  1988 SCALE  (2)1404

ACT:     Central  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 excise duty.

HEADNOTE:     The 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.     The 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’.     The 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.     Dismissing the appeal. the Court,     HELD:   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

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utilised in the manufacture of ossein and gelatine. [996E]     Collector of Customs, Bombay v. Swastic Woollen (P) Ltd. JUDGMENT:     ’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. [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.     From  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 No. 915/87-C.     M.K. Banerjee, Solicitor General, H. Sharma, Mrs. Sushma Suri for the Appellant.     Soli J. Sorabjee, A.N. Haksar. R. Narain, D.N Misra  and P.K. Ram for the Respondent.     The 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 Act, 1944.    The   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:     Crushed 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 bones.     The   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

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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. obtained   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 product’.     The  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.     We  see  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. There 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.     The  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. Whether  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

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respondent  company are entitled to the exemption under  the notification dated 30.6.79.     We  may  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. We said:     "In  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. An  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.  Even 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 the Tribunal.     We  therefore  see no reason to  entertain  this  appeal which will stand dismissed. S.K.A.                                     Appeal dismissed.