The main legal point established in the judgment is that the interpretation of legal provisions in notifications must consider the context, scheme, and object of the notification, and technical constructions that defeat the purpose of the exemption granted by the government are unwarranted and illegal.

( 1 ) IN this petition under Article 226 of the Constitution, the petitioner has challenged the order dated 30-1-1978 (Exhibit-F) of the Appellate Collector of Customs and Central Excise, Madras (hereinafter referred to as the Collector) in Appeal No. 199 of 1978 affirming the order dated 9-3-1977 of the Assistant Collector of Central Excise,. D. O. , Bellary (hereinafter referred to as the Assistant Collector) in order No. V/1/30/32/74 B. 1 (Exhibit-E ).

( 2 ) THE petitioner is a manufacturer of sugar and is, therefore, exigible to excise duties under the central Excises and Salt Act, 1944 (hereinafter referred to as the Act ). The factory of the petitioner that manufactures sugar was in existence and was working during the 'base period' defined in the Explanation to Notification No. 189/73, dated 4-10-1973 (Exhibit-A) issued by the central Government under sub-rule (1) of rule 8 of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) framed under the Act which allowed certain exemptions on sugar produced in the sugar factories on the terms and conditions stipulated therein. By Notification no. 78/74, dated 20-4-1974 (Exhibit-B) the Central Government with the object of encouraging the sugar factories to produce more sugar during loan periods granted further exemptions on the sugar manufactured in those periods specified in that notification.

( 3 ) IN this petition we are concerned with Item No. 3 of the notification dated 20-4-1974 which reads thus :

"3. Sugar produced in a factory during the period commencing from the 1st day of May, 1974 and ending with the 30th day of June, 1974 which is in excess of Thirty rupees 110% and not in excess of 180% of the quantity of per quintal sugar produced during the corresponding period in 1973. "

From the period from 1-5-1974 to 30-6-1974 the petitioner produced certain quantity of sugar, paid excise duties demanded by the authority and made a claim for rebate in terms of the notification dated 20-4-1974 before the Assistant Collector who by his order dated 9-3-1977 (Exhibit-E) has rejected the same in these words :

"in terms of items 3 and 3a of the table appended to notification No. 78/74-C. E. the sugar produced in a factory during the period 1-5-1974 to 30-6-1974 is entitled for rebate. Accordingly, M/s. Kampli Co-operative Sugar Factory have preferred their rebate claim for the period from 1-5-1974 to 30-6-1974. But, this factory has not produced any sugar during the corresponding period in 1973. e. , May and June, 1973. In other words, there was nil production during the corresponding base sub-period. Notification No. 189/73, dated 4-10-1973 clearly indicates that the exemption mentioned in the notification shall not be admissible to a factory which did not work during the base period. It is therefore clear that this factory is not entitled to any rebate if it has not produced any sugar during the base period. The expressions 'excess' and 'quantity produced' used in the notification are significant. Excess in the context can only mean the quantity by which one exceeds another implying thereby that there must be two sets of production figures for comparison to determine the excess produced. In the instant case, M/s. Kampli Co-operative Sugar Factory has production in the month of May, 1974 and nil production in the month of June, 1974. There was no production in the corresponding period of the sub-base period. e. , May, 1973. "

Against the said order of the Assistant Collector, the petitioner filed an appeal before the collector, who by his order dated 30-1-1978 (Exhibit-F) has dismissed the said appeal.

( 4 ) THE petitioner has urged that the extremely artificial and technical construction placed by the authorities, has defeated the object and intendment of the beneficial exemption granted by central Government to encourage the manufacture of sugar during the lean periods, is unwarranted and manifestly illegal.

( 5 ) IN justification of the impugned orders made,

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