Judgment

KRISHNA IYER, J. - The fate of this appeal, by special leave, turns on the construction of a notification issued by the Government of India dated April 20, 1960 under R. 8 (1) of the Central Excise Rules, 1944 whereby a qualified exemption was accorded to certain types of aluminium manufactures in the matter of excise duty. The ultimate statutory revision to the Central Government having been decided against the appellant company, it has challenged the correctness of the view based on which the revision petition was dismissed.

2. The facts, fortunately, are few and beyond controversy although the length of the litigation has been considerable and beyond necessity, this being the second time the appellant has had to come to this Court aggrieved by the revisory authority s refusal to grant refund of over-levied excise duty, as claimed by it. Had there been disputes on facts, we would have hesitated to reassess the findings but as the record stands, the sole question is one of construction.

3. If we may anticipate our ultimate conclusion even at the opening stage, this appeal deserves to be allowed as a matter of law, but what is more significant for society are three unhappy features which, we feel confident, the State will seriously consider. They are: (a) that good government involves not only diligent collection of taxes, but also ready refunds of excess levies; (b) that simplicity or easy comprehensibility in drafting legislation, including rules and notifications affecting the laity, is an art found absent, although not difficult to accomplish, given a fresh approach to use of statutory language; and (c) that a fair construction - not always one adverse to the assessee - is permissible and proper on the part of government and the taxing officers when enforcing fiscal legislation.

4. The appellant manufactures aluminium plates, sheets, circles, strips and foils which are the end products of its composite factory, but, as intermediate products, it also turns out ingots, bars, slabs, billets, pellets and the like which get consumed mostly in the process of manufacture of plates, sheets, and other end products and rarely by way of sales of slabs as such. The raw material i.e. aluminium is extracted by the company from bauxite from which ingots, slabs and the like are made which, in turn, are rolled into sheets, circles etc., for sale. It is one of the admitted features of this manufacturing process that about 50 per cent of the ingots slabs and billets used for further manufacture of plates, sheets, circles etc., become scrap and are melted to be put back along with raw scrap for the purpose of recycling. In short, aluminium is first converted into items like ingots, bars, slabs etc but when they are used up for finished products like plates and sheets, nearly half of the stuff is thrown back into scrap in which state it is remelted and starts its manufacturing journey over again.

5. We have now indicated how there are really two stages in the course of turn-out of the finished goods. Excise duty came to be imposed from March 1, 1960 on aluminium under the Finance Act for that year (we are not concerned with the same duty on the same commodity imposed in prior years). Item No. 27 which relates to aluminium, reads:

Description of goods Rate of Duty

Aluminium

(a) In any crude form including ingots, bars, blocks, slabs, billets, shots & pellets Three hundred rupees per metric tonne

(b) Manufactures, the following, namely, plates, sheets, circles, strips and foils in any form or size Five hundred rupees per metric tonne

A note appended to the entry is of significance and states:

"Under the Government of India, Ministry of Finance (Department of Revenue) Notification No. 29/60 Central Excises, dated the 1st March 1960, the following aluminium manufactures, namely plates, sheets, circles, strips and foils in any form or size in the manufacture of which duty paid aluminium in any form is used, are exempt from so much of the duty levi