Law:

Section:

Section 2(5)(a)(ii) of the Finance act, 1964,-Export rebate-Assessee, engaged, inter alia, in manufacture of oil, including vegetable oil, which was an industry specified in first schedule to the industries act, 1951, exported de-oiled cake which was a by-product of its solvent extraction plant-Whether assessee entitled to tax rebate under section 2(5)(a)(ii) on export of said de-oiled cake-Held, on facts, no Facts The assessee carried on business, inter alia, of manufacture of oil, including vegetable oil, in the assessment year 1964-65, it had exported de-oiled cake which was a by-product of its solvent extraction plant and claimed the benefit of additional export rebate provided for under section 2(5)(a )(ii). The ITO as well as the AAC rejected this claim. However, the Tribunal accepted the assessee's argument that the assessee was engaged in an industry specified in the First Schedule to the Industries Act, 1951 and that section 2(5 )(a)( ii) must be so read as to take within it any articles, including by-products, in the course of the manufacture of an article in the industry concerned, and that since de-oiled cake was a by-product in the manufacture of vegetable oils and vanaspati, the assessee was entitled to the benefit of the aforesaid section 2(5 )(a)( ii). The Tribunal also agreed to the assessee's view that section 2(5)(c) disentitling, inter alia, vegetable oils and vanaspati from the additional rebate allowable under section 2(5)(a)( ii), thereof, would not operate to deny the benefit to the assessee as de-oiled cake, which was the item exported by the assessee, was not mentioned in the said section 2(5)(c). The Tribunal, accordingly, directed the ITO to allow the additional rebate claimed by the assessee. On reference, the revenue argued that since de-oiled cake was not an item figuring in the First Schedule to the Industries Act, 1951, the assessee's claim could not be allowed. Held It is true that while making a reference to the articles the export of which is contemplated in section 2(5)( a)(ii), the words used are "engaged in the manufacture of any articles in an industry specified in the First Schedule to the Industries (Development and…

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