Judgment

GROVER, J.: This is an appeal by special leave from a judgment of the Punjab High Court (Circuit Bench) Delhi in which, the validity and legality of the levy of cess by way of excise duty on the rubber used by manufacturers of chappals under the provisions of the Rubber Act 1947. (Act XXIV of 1947), as amended hereinafter called the Act, have been assailed.

2. M/s. Jullundur Rubber Goods Manufacturers, Association is an association of rubber chappal manufacturers at Jullundur in the State of Punjab. Its members, who manufacture chappals, are stated to use about 15 to 20 per cent of rubber in the process of their manufacture while the rest of the materials used by them consists of various other articles. A petition was filed under Arts. 226 and 227 on behalf of the aforesaid Association, the second petitioner being its Secretary, challenging the levy and collection from the manufacturers of chappals under the provisions of the Act, the Rules framed and the relevant notification issued thereunder of a duty as a result of the amendment made in S. 12 of the Act by the Rubber Act of 1960. A learned Single Judge dismissed the writ petition and his judgment was affirmed by a Division Bench of the High Court.

3. The contentions which have been raised are (1) the duty sought to be imposed under S. 12 as amended being outside the ambit of Entry 84 of List I in the Schedule to the Constitution is beyond the legislative competence of the Parliament; (2) Section 12 (2) suffers from the vice of excessive delegation. It confers uncontrolled and unrestricted discretion upon the Rubber Board to levy upon and collect duty of excise from either the owners of the rubber producing estates or the users so called manufacturers (of rubber) without specifying the circumstances under which it should be imposed upon the one or the other nor has any guiding policy or principle been laid down in the Act for making a choice. (3) In any case the Rules which have been framed do not satisfy the provisions of S. 12 (2) of the Act and do not indicate with sufficient clarity and precision on whom the levy is to be made and from whom the duty is to be collected as between the owners of the estates and the manufacturers.

4. The relevant statutory provisions may first be noticed. In 1947 the Central legislature enacted. The Rubber (Production and Marketing) Act 1947. Its name was changed to Rubber Act 1947 by the Rubber (Production and Marketing) Amendment Act 1954. The Act was enacted to provide for the development, under the control of the Union, of the rubber industry. Under S. 4 the Rubber Board was to be constituted. The functions of the Board were enumerated in section 8. It was to be its duty to promote by such measure as it thought fit the development of the rubber industry. Under S. 10 it was obligatory on every person owning land planted with rubber plants to get himself registered as an owner by applying to the Board. Section 12 provided for the imposition of rubber cess. Under S. 14 no person could sell or otherwise dispose of or buy or otherwise acquire rubber except in accordance with the terms of general or special license issued by the Board. The Central Government was given the over all control over the acts of the Board by S. 22. Section 25 empowered the Central Government to make Rules. Prior to the amendment made by the Rubber Amendment Act of 1960 (Act XXI of 1960) the duty of excise was payable under S. 12 (2) by the owners of the estates on which rubber was produced and it was to be paid by them to the Board within one month from the date on which they received a notice of demand. By Act XXI of 1960 an important change was made which affected the manufacturers and the duty could be collected by the Board either from the owners of the estates or from the manufacturers by whom the rubber is used.

5. At this stage the relevant provisions of the Act with which we are concerned may be reproduced:

"Section 3 (e) "manufacturer" means any person e