Full Judgment Text
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PETITIONER:
UNION OF INDIA & ORS.
Vs.
RESPONDENT:
M/S MODI RUBBER LIMITED
DATE OF JUDGMENT18/08/1986
BENCH:
BHAGWATI, P.N. (CJ)
BENCH:
BHAGWATI, P.N. (CJ)
KHALID, V. (J)
OZA, G.L. (J)
CITATION:
1986 AIR 1992 1986 SCR (3) 587
1986 SCC (4) 66 JT 1986 178
1986 SCALE (2)269
CITATOR INFO :
F 1987 SC1747 (1)
ACT:
Exemption from duty in special cases-Government issuing
two Notifications on 1.8.74 and 1.3.1981 using the
expression "duty of excise"-Whether the said expression is
limited to basic "duty of excise" levied under the Central
Excise and Salt Act, 1944 or it covers also "special duty of
excise" levied under various Finance Acts, additional duty
levied under the Additional Duty of Excise (goods of special
importance) Act, 1957 or any other kind of auxiliary duty of
excise levied under a Central enactment.
HEADNOTE:
The manufacture of tyres is subject to duty of excise
under the Central Excise and Salt Tax Act, 1944. Section
3(1) of this Act provides that there shall be levied and
collected in such manner as may be prescribed by Rules made
under the Act duties of excise on all excisable goods other
than salt which are produced and manufactured in India. The
word duty for the purposes of these Rules is defined in
clause (v) of Rule 2 to mean "the duty payable under section
3 of the Act." Section 8(1) authorises the Central
Government to exempt from duty in special cases by
Notifications made thereunder. As such the exemption which
the Central Government can grant by issuing Notification
under sub-rule (1) of Rule 8 of the Act can only be from the
whole or any part of the duty of excise payable under
section 3 of the Act.
Since 1963 special duty of excise was levied inter alia
on manufacture of tyres from year to year up to 1971 by
various Finance Acts passed from time to time. The levy of
special duty of excise was discontinued from 1972 until 1978
when it was again revised by the Finance Act, 1978.
Thereafter, it continued to be levied from year to year.
By virtue of the powers vested in it, the Central
Government issued the Notification No. 123/74/C-E dated
August 1, 1974. The assessee which manufactured "tyres" and
who is eligible to exemption under the said Notification,
submitted, prior to 9.11.1979, classification list in
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588
terms of Rule 173B of the Central Excise Rules, 1944 and
paid excise duty on the basis that the Notification dated
August 1, 1974 granted partial exemption only in respect of
basic excise duty levied under the Act and did not claim any
such exemption in respect of special duty of excise.
However, on 9.11.1979 the assessee, while submitting its
classification list contended that by reason of the
Notification dated 1.8.74 the assessee was exempted from
payment not only in respect of basic excise duty levied
under the Act but also in respect of special duty of excise
levied under the relevant Finance Acts because the language
used in the Notification was not restrictive and it referred
generally "to duty of excise" without any qualification and
it, therefore, covered all duties of excise whether levied
under the Central Excise and Salt Act, 1944 or under any
other Central enactment. The Assistant Collector of Central
Excise rejected the claim and the assessee being aggrieved
filed a writ petition before the Delhi High Court. The
Central Government issued under Notification No. 27/81/C-E
dated 1.3.81, during the pendency of the writ petition,
resulting in the amendment of the writ petition so as to
bring the question of interpretation of the second
Notification as well.
The Delhi High Court upheld the contention of the
assessee. Meanwhile Parliament also enacted the Central
Excise Laws (Amendment and Validation) Act 1982 laying down
statutory rules which should guide the court in interpreting
Notifications granting exemption from payment of duty of
excise etc. Hence the writ petition by the assessee
challenging the constitutional validity of the 1982
Amendment and Validation Act and the appeal by Revenue after
obtaining special leave.
Allowing the appeal and dismissing the writ petitions,
the Court,
^
HELD: 1. The Central Excise Laws (Amendment and
Validation) Act, 1982 is merely declaratory of the existing
law and hence its constitutional validity cannot be
assailed. [601B-C]
2. Under the Notifications dated 8th November, 1967,
Ist August, 1974 and Ist March, 1981 the assessee is
entitled to exemption only in respect of the basic duty of
excise leviable under the Central Excise and Salt Act, 1944
and are not entitled to claim any exemption in respect of
special duty of excise or additional duty of excise or
auxiliary duty of excise. [601D]
3.1 The Notifications dated Ist August, 1974 and Ist
March, 1981
589
are issued under Rule 8(1) of the Central Excise Rules, 1944
and since the definition of "duty" in Rule 2 Clause (v) must
necessarily be projected in Rule 8(1) and the expression
"duty of excise" in Rule 8 (1) must be read in the light of
that definition, the same expression used in these two
Notifications issued under Rule 8(1) simpliciter, without
anything more must also be interpreted in the same sense,
namely, duty of excise payable under the Central Excise and
Salt Act, 1944 and the exemption granted under both these
Notifications must be regarded as limited only to such duty
of excise. [598D-F]
3.2 Merely because, as a matter of drafting, the
Central Government has in some other Notifications
specifically referred to the excise duty in respect of which
exemption is granted as "duty of excise" leviable under the
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Central Excise and Salt Act, 1944, it does not follow that
in the absence of such words of specificity in the 1974 and
1981 Notifications, the expression "duty of excise" standing
by itself must be read as referring to all duties of excise.
The legislature sometimes, with a view to making its
intention clear beyond doubt, uses language exabundanti
cautela though it may not be strictly necessary and even
without it the same intention can be spelt out as a matter
of judicial construction and this would be more so in case
of subordinate legislation by the executive. [596F-H]
3.3 Further the expression "duty of excise" in the
Notification dated Ist August 1974 could not possibly be
read as comprehending special duty of excise which did not
exist at the date of this Notification and came to be levied
almost four years later. It is only when a new duty of
excise is levied, whether special duty of excise or
auxiliary duty of excise or any other kind of duty of
excise, that a question could arise whether any particular
article should be exempted from payment of such duty of
excise and the Central Government would then have to apply
its mind to this question and having regard to the nature
and extent of such duty of excise and the object and purpose
for which it is levied and the economic situation including
supply and demand position then prevailing, decide whether
exemption from payment of such excise duty should be granted
and if so, to what extent. [597F-G; 598B-C]
3.4 Undoubtedly, by reason of sub-section 4 of section
32 of the Finance Act, 1979 and similar provision in the
other Finance Acts, Rule 8(1) would become applicable
empowering the Central Government to grant exemption from
payment of special duty of excise, but when the Central
Government exercises this power, it would be doing so under
590
Rule 8(1) read with sub-section 4 of section 32 or other
similar provision. The reference to the source of power in
3333333such a case would not be just to Rule 8(1), it does
not of its own force and on its own language apply to
granting of exemption in respect of special duty of excise,
but the reference would have to be to Rule 8(1) read with
sub-section 4 of section 32 or other similar provision.
Therefore, whether a Notification granting exemption is
issued only under sub-rule (1) of Rule 8 of the Central
Excise Rules 1944 without reference to any other statute
making the provisions of the Central Excise and Salt Act,
1944 and the Rules made thereunder applicable to the levy
and collection of special, auxiliary or any other kind of
excise duty levied under such statute, the exemption must be
read as limited to the duty of excise payable under the
Central Excise and Salt Act, 1944 and cannot cover such
special, auxiliary or other kind of excise. In the instant
case, the Notifications were issued under sub-rule (1) of
Rule 8 of the Central Excise Rules 1944 simpliciter without
reference to any other statute. [599C-D; 600D-E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 415-
419 of 1983.
From the Judgment and Order dated 6.8.1982 of the Delhi
High Court in C.W.P. Nos. 1773 of 1979, 1517,2156,2410 and
2411 of 1981.
and
WRIT PETITION NO. 498 OF 1983
Under Article 32 of the Constitution of India.
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K. Parasaran, Attorney Gen., M. Chandrasekharan and
C.V.S. Rao for the Appellants in C.A. Nos. 415-419 of 1983
and Respondents in Writ Petition No. 498 of 1983.
Soli J. Sorabji, H. Salve, T.M. Ansari and Ravindra
Narain for the Respondent in C.A. Nos. 415-419 of 1983 and
for the Petitioners in Writ Petition No. 498 of 1983.
The Judgment of the Court was delivered by
BHAGWATI, CJ. These appeals and writ petition raise a
short question of the construction of the expression "duty
of excise" employed in two Notifications issued by the
Government of India under sub-rule (1) of Rule 8 of the
Central Excise Rules 1944, one bearing No. 123/74-C.E. dated
Ist August 1974 and the other bearing No. 27/81-C.E. dated
Ist March 1981. The question is whether this expression is
591
mited in its connotation only to basic duty of excise levied
under the Central Excise and Salt Act 1944 or it also covers
special duty of excise levied under various Finance Bills
and Acts, additional duty of excise levied under the
Additional Duty of Excise (goods of special importance) Act
1957 and any other kind of Duty of excise levied under a
Central enactment. If this question is decided in favour of
the assessee and it is held, accepting the contention of the
assessee, that the expression "duty of excise" in the two
Notifications is not confined only to the basic duty of
excise levied under the Central Excise and Salt Act 1944 and
but also comprises special duty of excise, additional duty
of excise or any other kind of duty of excise, a further
contention is raised on behalf of the assessee challenging
the constitutional validity of the Central Excise Laws
(Amendment and Validation) Act 1982 by which Parliament
sought to lay down certain statutory rules for
interpretation for arriving at the true meaning and content
of the expression "duty of excise" in the Notifications
issued under sub-rule (1) of Rule 8 of the Central Excise
Rules 1944 and which consequentially had the effect of
restricting the meaning and connotation of the expression
"duty of excise" in the two Notifications in question to
basic duty of excise levied under the Central Excises and
Salt Act 1944. The facts giving rise to these appeals and
writ petition are few and may be briefly stated as follows:
The assesse in these appeals and writ petition is a
limited company which manufactures tyres. The manufacture of
tyres is subject to duty of excise under the Central Excise
and Salt Act 1944. Section 3 sub-section(i) of this Act
provides that there shall be levied and collected in such
manner as may be prescribed by Rules made under the Act
duties of excise on all excisable goods other than Salt
which are produced and manufactured in India as and at the
rates Set-Forth in the First Schedule. The First Schedule
enumerates various items of goods which are liable to duty
of excise and also Set-Forth the rate at which the duty of
excise shall be charged on those goods. Item 16 in the First
Schedule reads: "Tyres and Tubes" and the manufactures of
tyres is therefore is liable to excise duty at the rates
Set-Forth in the First Schedule. Section 37 of the Act
confers power on the Central Government to make rules for
carrying into effect the purposes of the Act and in exercise
of this power the Central Government has made the Central
Excise Rules 1944. Rule 8 of these Rules is material for the
determination of the question of interpretation which arises
in these appeals and writ petition and we may therefore
reproduce it in extenso:
"Rule 8. Power to authorise exemption from duty in
spe-
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592
cial cases-(1) The Central Government may from
time to time, by notification in the Official
Gazette, exempt (subject to such conditions as may
be specified in the notification) any excisable
goods from the whole or any part of duty leviable
on such goods.
(2) The (Central Board of Excise and Customs)
may by special order in each case exempt from the
payment of duty, under circumstances of an
exceptional nature, any excisable goods."
The word "duty" for the purposes of these Rules is defined
in Clause (v) of Rule 2 to mean "the duty payable under
section 3 of the Act" and obviously therefore the exemption
which the Central Government can grant by issuing
Notification under sub-rule (1) of Rule 8 can only be from
the whole or any part of the duty of excise payable under
Section 3 of the Central Excise and Salt Act 1944.
It seems that the Central Government issued
Notifications from time to time under sub-rule (1) of Rule 8
exempting various categories of excisable goods from the
whole or any part of the excise duty leviable on such goods.
So far as tyres are concerned, a Notification bearing No.
123/74-C.E. dated 1st August 1974 was issued by the Central
Government exempting tyres for motor vehicles from a part of
the excise duty leviable thereon and since it is this
Notification which inter alia falls for construction, it
would be desirable to set it out in full:
Notification No. 123/74-C.E. dated Ist August 1974
"In the exercise of the powers conferred by
sub-rule (1) of Rule 8 of the Central Excise
Rules, 1944, the Central Government hereby exempts
tyres for motor vehicles falling under sub-item
(1) of Item No. 16 of the First Schedule to the
Central Excises and Salt Act, 1944 (1 of 1944),
from so much of duty of excise leviable thereon as
is in excess of fifty-five per cent ad valorem."
Subsequently, another Notification bearing No. 27/81-C.E.
dated 1st March 1981 was issued by the Central Government in
respect of tyres for two-wheeled and three-wheeled motor
vehicles, power cycles, power cycled rickshaws, tractors and
trailors exempting these goods "from so much of the duty of
excise leviable thereon as is in excess of
593
the duty specified in the corresponding entry in Col. 5" of
the Table annexed to this Notification.
Now since 1963 special duty of excise was levied inter
alia on manufacture of tyres from year to year up to 1971 by
various Finance Acts passed from time to time. The levy of
special duty of excise was discontinued from 1972 until 1978
when it was again revived by the Finance Act 1978.
Thereafter, it continued to be levied from year to year
right up to the period with which we are concerned in the
present appeals and writ petition. The provisions levying
special duty of excise in these various Finance Acts were in
almost identical terms and it would therefore be sufficient
if we reproduce the relevant provision in only one of the
Finance Acts. We propose to refer to the Finance Act 1979
since that is the Finance Act which was in operation when
the present controversy in regard to the interpretation of
the expression "duty of excise" arose between the assessee
and the Revenue. Section 32 of the Finance Act 1979 provided
as follows:
32. Special Duties of excise-(1) In the case
of goods chargeable with a duty of excise under
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the Central Excises Act as amended from time to
time, read with any notification for the time
being in force issued by the Central Government in
relation to the duty so chargeable there shall be
levied and collected a special duty of excise
equal to five per cent of the amount so chargeable
on such goods.
(2) Sub-Section (1) shall cease to have
effect after the 31st day of March, 1980, except
as respects things done or omitted to be done
before such cesser; and Section 6 of the General
Clauses Act, 1897, shall apply upon such ces-ser
as if the said sub-section had then been repealed
by a Central Act.
(3) The special duties of excise referred to
in sub-section (1) shall be in addition to any
duties of excise chargeable on such goods under
the Central Excises Act, or any other law for the
time being in force.
(4) The provisions of the Central Excises Act
and the rules made thereunder, including those
relating to refunds and exemptions from duties,
shall, as far as may be, apply in relation to the
levy and collection of the special duties of
594
excise leviable under this section in respect of
any goods as they apply in relation to the levy
and collection of the duties of excise on such
goods under that Act or those rules as the case
may be.
The Finance Acts from 1973 to 1976 also levied auxiliary
excise duty on various categories of excisable goods
including tyres but the levy of auxiliary excise duty was
discontinued with effect from 1977 and we are, therefore,
not concerned with it so far as the present appeals and writ
petition are concerned.
Prior to 9th November 1979 the assessee submitted
classification list in terms of Rule 173 B of the Central
Excise Rules, 1944, and paid excise duty on the basis that
the Notification dated 1st August 1974 granted partial
exemption only in respect of basic excise duty levied under
the Central Excise and Salt Act 1944 and did not claim any
such exemption in respect of special duty of excise.
However, on 9th November 1979 the assessee, while submitting
its classification list, contended that by reason of the
Notification dated 1st August 1974 the assessee was exempted
from payment not only in respect of basic excise duty levied
under the Central Excise and Salt Act 1944 but also in
respect of special duty of excise levied under the relevant
Finance Acts, because the language used in this Notification
was not restrictive and it referred generally to "duty of
excise" without any qualification and it therefore covered
all duties of excise whether levied under the Central Excise
and Salt Act 1944 or under any other Central enactment. This
contention was advanced by the assessee in relation to the
period from 9th November 1979 to October 1982. The Assistant
Collector of Excise however, rejected this contention and
held that the term "duty of excise" in the Notification
dated 1st August 1974 referred merely to the basic duty of
excise levied under the Central Excise and Salt Act 1944 and
the exemption granted under that Notification was not
available in respect of special duty of excise levied under
the Finance Acts. The assessee thereupon filed a writ
petition in the Delhi High Court challenging the order of
the Assistant Collector of Excise. During the pendency of
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this writ petition, the Notification dated 1st March 1981
was issued by the Central Government and the assessee was
therefore constrained to amend the writ petition so as to
bring the question of interpretation of this Notification
also before the court. The Delhi High Court by a Judgment
delivered on 6th August 1982 upheld the contention of the
assessee and took the view that the expression "duty of
excise" in the two Notifications dated 1st August 1974
595
and 1st March 1981 included not merely basic duty of excise
levied under the Central Excise and Salt Act 1944 but also
special duty of excise levied under the various Finance Acts
and any other duty or duties of excise levied under Central
enactment. The Central Government was of the view that the
Delhi High Court judgment was erroneous and it accordingly
preferred the present appeals after obtaining special leave
from this Court. Meanwhile, Parliament also enacted the
Central Excise Laws (Amendment and Validation) Act 1982
laying down statutory rules which should guide the court in
interpreting Notifications granting exemption from payment
of duty of excise and prescribing the conditions on which a
Notification granting exemption from payment of duty of
excise can be construed as applicable to duty of excise
levied under any Central law making the provisions of the
Central Excise and Salt Act 1944 and the Rules made
thereunder applicable to the levy and collection of duty of
excise under such Central Law. Since this enactment had the
effect of limiting the interpretation of the expression
"duty of excise" in the two Notifications dated Ist August
1974 and Ist March 1981 to the basic duty of excise levied
under Central Excise and Salt Act 1944 and excluding from
its coverage special duty of excise levied under various
Finance Acts, the assessee filed the present writ petition
challenging the constitutional validity of this enactment.
That is how the present appeals and writ petition have come
up for hearing before us.
The first question that arises for consideration on
these facts is as to what is the true import of the
expression "duty of excise" in the notifications dated 1st
August 1974 and 1st March 1981. It is only if this
expression is held to include duties of excise leviable not
only under the Central Excise and Salt Act, 1944 but also
under any other enactments that the question would arise
whether the Central Laws (Amendment and Validation) Act,
1982 is constitutionally invalid. We, therefore, asked the
learned counsel appearing on behalf of the parties to
confine their arguments only to the first question of
interpretation of the expression "duty of excise" in the
notifications dated 1st August 1974 and 1st March 1981.
Both these Notifications, as the opening part shows,
are issued under Rule 8(1) of the Central Excise Rules, 1944
and since the definition of ’duty’ in Rule 2, cl. (v) must
necessarily be projected in Rule 8(1) and the expression
’duty of excise’ in Rule 8(1) must be read in the light of
that definition, the same expression used in these two
Notifications issued under Rule 8(1) must also be
interpreted in the same
596
sense, namely, duty of excise payable under the Central
Excise and Salt Act, 1944 and the exemption granted under
both these Notifications must be regarded as limited only to
such duty of excise. But the respondents contended that the
expression ’duty of excise’ was one of large amplitude and
in the absence of any restrictive or limitative words
indicating that it was intended to refer only to duty of
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excise leviable under the Central Excise and Salt Act, 1944,
it must be held to cover all duties of excise whether
leviable under the Central Excise and Salt Act, 1944 or
under any other enactment. The respondents sought to support
this contention by pointing out that whenever the Central
Government wanted to confine the exemption granted under a
notification to the duty of excise leviable under the
Central Excise and Salt Act, 1944, the Central Government
made its intention abundantly clear by using appropriate
words of limitation such as "duty of excise leviable .....
under section 3 of the Central Excise and Salt Act, 1944" or
"duty of excise leviable ..... under the Central Excise and
Salt Act, 1944" or "duty of excise leviable ..... under the
said Act" as in the Notification No. CER-8(2)/55-C.E. dated
17th September 1955, Notification No. 255/77-C.E. dated 20th
July 1977, Notification No. CER-8(1)/55-C.E. dated 2nd
September 1955 Notification No. C.E.R.-8(9)/55-C.E. dated
31st December 1955, Notification No. 95/61-C.E. dated 1st
April 1961, Notification No. 23/55-C.E. dated 29th April
1955 and similar other notifications. But, here said the
respondents, no such words of limitation are used in the two
Notifications in question and the expression "duty of
excise" must, therefore, be read according to its plain
natural meaning as including all duties of excise, including
special duty of excise and auxiliary duty of excise. Now, it
is no doubt true that in these various notifications
referred to above, the Central Government has, while
granting exemption under Rule 8(1), used specific language
indicating that the exemption, total or partial, granted
under each such notification is in respect of excise duty
leviable under the Central Excise and Salt Act, 1944. But,
merely because, as a matter of drafting, the Central
Government has in some notifications specifically referred
to the excise duty in respect of which exemption is granted
as ’duty of excise’ leviable under the Central Excise and
Salt Act, 1944, it does not follow that in the absence of
such words of specificity, the expression ’duty of excise’
standing by itself must be read as referring to all duties
of excise. It is not uncommon to find that the legislature
sometimes, with a view to making its inention clear beyond
doubt, uses language ex abundanti cautela though it may not
be strictly necessary and even without it the same intention
can be spelt out as a matter of judicial construction and
this would be more so
597
in case of subordinate legislation by the Executive. The
officer drafting a particular piece of subordinate
legislation in the Executive Department may employ words
with a view to leaving no scope for possible doubt as to its
intention or sometimes even for greater completeness, though
these words may not add anything to the meaning and scope of
the subordinate legislation. Here, in the present
Notifications, the words ’duty of excise leviable under the
Central Excise and Salt Act, 1944’ do not find a place as in
the other Notifications relied upon by the respondents. But,
that does not necessarily lead to the inference that the
expession ’duty of excise’ in these Notifications was
intended to refer to all duties of excise including special
and auxiliary duties of excise. The absence of these words
does not absolve us from the obligation to interpret the
expression ’duty of excise’ in these Notifications. We have
still to construe this expession-what is its meaning and
import-and that has to be done bearing in mind the context
in which it occurs. We have already pointed out that these
Notifications having been issued under Rule 8(1), the
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expression ’duty of excise’ in these Notifications must bear
the same meaning which it has in Rule 8(1) and that meaning
clearly is-excise duty payable under the Central Excise and
Salt Act, 1944 as envisaged in Rule 2 clause (v). It cannot
in the circumstances bear an extended meaning so as to
include special excise duty and auxiliary excise duty.
Moreover, at the date when the first Notification was
issued, namely, 1st August 1974, there was no special duty
of excise leviable on tyres. It came to be levied on tyres
with effect from the financial year 1978 under various
Finance Acts enacted from year to year. It is therefore
difficult to understand how the expression ’duty of excise’
in the Notification dated 1st August 1974 could possibly be
read as comprehending special duty of excise which did not
exist at the date of this Notification and came to be levied
almost four years later. When special duty of excise was not
in existence at the date of this Notification, how could the
Central Government, in issuing this Notification, have
intended to grant exemption from payment of special excise
duty? The presumption is that when a Notification granting
exemption from payment of excise duty is issued by the
Central Government under Rule 8(1), the Central Government
would have applied its mind to the question whether
exemption should be granted and if so to what extent. And
obviously that can only be with reference to the duty of
excise which is then leviable. The Central Government could
not be presumed to have projected its mind into the future
and granted exemption in respect of excise duty which may be
levied in the future,
598
without considering the nature and extent of such duty and
the object and purpose for which such levy may be made and
without taking into account the situation which may be
prevailing then. It is only when a new duty of excise is
levied, whether special duty of excise or auxiliary duty of
excise or any other kind of duty of excise, that a question
could arise whether any particular article should be
exempted from payment of such duty of excise and the Central
Government would then have to apply its mind to this
question and having regard to the nature and extent of such
duty of excise and the object and purpose for which it is
levied and the economic situation including supply and
demand position then prevailing, decide whether exemption
from payment of such excise duty should be granted and if
so, to what extent. It would be absurd to suggest that by
issuing the Notification dated 1st August 1974 the Central
Govenment intended to grant exemption not only in respect of
excise duty then prevailing but also in respect of all
future duties of excise which may be levied from time to
time.
We have already pointed out, and this is one of the
principal arguments against the contention of the
respondents, that by reason of the definition of "duty" in
clause (v) of Rule 2 which must be read in Rule 8 (1), the
expression ’duty of excise’ in the notifications dated 1st
August, 1974 and 1st March, 1981 must be construed as duty
of excise payable under the Central Excise and Salt Act,
1944. The respondents sought to combat this conclusion by
relying on sub-section (4) of section 32 of the Finance Act,
1979-there being an identical provision in each Finance Act
levying special duty of excise-which provided that the
provisions of the Central Excise and Salt Act, 1944 and the
rules made thereunder including those relating to refunds
and exemptions from duties shall, as far as may be, apply in
relation to the levy and collection of special duty of
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excise as they apply in relation to the levy and collection
of the duty of excise under the Central Excise and Salt Act,
1944. It was urged on behalf of the respondents that by
reason of this provision, Rule 8(1) relating to exemption
from duty of excise became applicable in relation to the
levy and collection of special duty of excise and exemption
from payment of special duty of excise could therefore be
granted by the Central Government under Rule 8(1) in the
same manner in which it could be granted in relation to the
duty of excise payable under the Central Excise and Salt
Act, 1944. The argument of the respondents based on this
premise was that the reference to Rule 8(1) as the source of
the power under which the notifications dated 1st August,
1974 and 1st March, 1981 were issued could not therefore be
relied upon as indicating that the duty of excise from
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which exemption was granted under these two notifications
was limited only to the duty of excise payable under the
Central Excise and Salt Act, 1944 and the expression ’duty
of excise’ in these two notifications could legitimately be
construed as comprehending special duty of excise. This
argument is, in our opinion, not well-founded and cannot be
sustained. It is obvious that when a notification granting
exemption from duty of excise is issued by the Central
Government in exercise of the power under Rule 8(1)
simpliciter, without anything more, it must, by reason of
the definition of ’duty’ contained in Rule 2 clause (v)
which according to the well-recognised canons of contruction
would be projected in Rule 8(1), be read as granting
exemption only in respect of duty of excise payable under
the Central Excise and Salt Act, 1944. Undoubtedly, by
reason of sub-section (4) of section 32 of the Finance Act,
1979 and similar provision in the other Finance Acts, Rule
8(1) would become applicable empowering the Central
Government to grant exemption from payment of special duty
of excise, but when the Central Government exercises this
power, it would be doing so under Rule 8(1) read with sub-
section (4) of section 32 or other similar provision. The
reference to the source of power in such a case would not be
just to Rule 8(1), since it does not of its own force and on
its own language apply to granting of exemption in respect
of special duty of excise, but the reference would have to
be to Rule 8(1) read with sub-section (4) of section 32 or
other similar provision. It is significant to note that
during all these years, whenever exemption is sought to be
granted by the Central Government from payment of special
duty of excise or additional duty of excise, the recital of
the source of power in the notification granting exemption
has invariably been to Rule 8(1) read with the relevant
provision of the statute levying special duty of excise or
additional duty of excise, by which the provisions of the
Central Excise and Salt Act, 1944 and the rules made
thereunder including those relating to exemption from duty
are made applicable. Take for example, the notification
bearing No. 63/78 dated 1st August, 1978 where exemption is
granted in respect of certain excisable goods "from the
whole of the special duty of excise leviable thereon under
sub-clause (1) of clause 37 of the Finance Bill, 1978". The
source of the power recited in this notification is "sub-
rule (1) of Rule 8 of the Central Excise Rules, 1944 read
with sub-clause (5) of clause 37 of the Finance Bill, 1978".
So also in the notification bearing No. 29/79 dated 1st
March, 1979 exempting unmanufactured tobacco "from the whole
of the duty of excise leviable thereon both under the
Central Excise and Salt Act, 1944 and Additional Duties of
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Excise (Goods of Special Importance) Act, 1957", the
reference to the source
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of power mentioned in the opening part of the notification
is "sub-rule (1) of Rule 8 of the Central Excise Rules, 1944
read with sub-section (3) of section 3 of the Additional
Duties of Excise (Goods of Special Importance) Act, 1957".
The respondents have in fact produced several notifications
granting exemption in respect of special duty of excise or
additional duty of excise and in each of these
notifications, wefind that the source of power is described
as sub-rule (1) of Rule 8 of the Central Excise Rules, 1944
read with the relevant provision of the statute levying
special duty of excise or additional duty of excise by which
the provisions of the Central Excise and Salt Act, 1944 and
the Rules made thereunder including those relating to
exemption from duty are made applicable. Moreover the
exemption granted under all these Notifications specifically
refers to special duty of excise or additional duty of
excise, as the case may be. It is, therefore, clear that
where a notification granting exemption is issued only under
sub-rule (1) of Rule 8 of the Central Excise Rules 1944
without reference to any other statute making the provisions
of the Central Excise and Salt Act, 1944 and the Rules made
thereunder applicable to the levy and collection of special,
auxiliary or any other kind of excise duty levied under such
statute, the exemption must be read as limited to the duty
of excise payable under the Central Excise and Salt Act,
1944 and cannot cover such special, auxiliary or other kind
of duty of excise. The Notifications in the present case
were issued under sub-rule (1) of Rule 8 of the Central
Excise Rules 1944 simpliciter without reference to any other
statute and hence the exemption granted under these two
Notifications must be construed as limited only to the duty
of excise payable under the Central Excise and Salt Act,
1944.
We may incidentally mention that in the appeals a
question of interpretation was also raised in regard to the
Notification bearing No. 249/67 dated 8th November 1967
exempting tyres for tractors from "so much of the duty
leviable thereon under item 16 of the First Schedule to the
Central Excise and Salt Act, 1944 as is in excess of 15%".
The argument of the respondents in the appeals was that the
exemption granted under this Notification was not limited to
the duty of excise payable under the Central Excise and Salt
Act, 1944 but it also extended to special duty of excise,
additional duty of excise and auxiliary duty of excise
leviable under other enactments. This argument plainly runs
counter to the very language of this Notification. It is
obvious that the exemption granted under this Notification
is "in respect of so much of the duty leviable thereon under
item 16 of the First Schedule to the Central Excise and Salt
Act, 1944 as is in excess of 15%" and these
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words describing the nature and extent of the exemption on
their plain natural construction, clearly indicate that the
exemption is in respect of duty of excise leviable under the
Central Excise and Salt Act, 1944 and does not cover any
other kind of duty of excise. No more discussion is
necessary in regard to this question beyond merely referring
to the language of this Notification.
On the above view taken by us, we must hold that the
Central Excise Laws (Amendment and Validation) Act, 1982 is
merely declaratory of the existing law and hence its
constitutional validity cannot be assailed.
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We accordingly, allow the appeals and dismiss the writ
petition. We set aside the judgment of the High Court and
hold that under the Notifications dated 8th November, 1967,
1st August, 1974 and 1st March, 1981 the respondents in the
appeals and the petitioners in the writ petition are
entitled to exemption only in respect of the basic duty of
excise leviable under the Central Excise and Salt Act, 1944
and are not entitled to claim any exemption in respect of
special duty of excise or additional duty of excise or
auxiliary duty of excise. The respondents in the appeals and
the petitioners in the writ petition will pay the costs of
the Union of India.
S.R. Appeals allowed and Petition dismissed.
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