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1983 Supreme(Cal) 290
High Court Of Calcutta
ASHA MUKUL PAL
R.K.CHEMICAL INDUSTRIES PRIVATE LTD. - Appellant
Versus
SUPERINTENDENT OF CENTRAL EXCISE, CALCUTTA-III DIVISION - Respondent
Civil Rule No. 12902 Of 1981
Decided On : 10/05/1983
N.L.BANERJI, S.C.BOSE, S.M.SANYAL
Specified goods, though subject to a different exemption limit, do not cease to be excisable goods and are eligible for the general exemption limit applicable to all excisable goods.
Headnote:
CENTRAL EXCISE - EXEMPTION - NOTIFICATION - INTERPRETATION - MANUFACTURER OF EXCISA-BLE GOODS MORE THAN ONE ITEM - LIMIT OF EXEMPTION - WHETHER SPECIFIED GOODS CEASE TO BE EXCISA-BLE GOODS - CENTRAL EXCISES AND SALT ACT, 1944 (1 OF 1944), SEC. 2 (D), NOTIFICATIONS NOS. 71/78-C. E. , DATED 1-3-1978, 141/79-C. E. , DATED 30-3-1979, 80/80-C. E. , DATED 19-6-1980 AND 50/81-C. E. , DATED 1-3-1981.
Fact of the Case:
Petitioner, a manufacturer of starch and gum power, challenged the denial of exemption from excise duty under Notification No. 80/80-C. E. , dated 19-6-1980, as amended by Notification No. 50/81-C. E. , dated 1-3-1981. The petitioner argued that the aggregate value of its manufacturing starch and gum power was below Rs. 20 lakhs and thus it should have been granted exemption as per the notification. However, the excise authorities declined the exemption as the value of total clearances of starch, which was a specified goods, exceeded Rs. 15 lakhs.
Finding of the Court:
The court held that the petitioner was entitled to the exemption under Notification No. 80/80-C. E. , dated 19-6-1980, as amended by Notification No. 50/81-C. E. , dated 1-3-1981, since the aggregate value of the clearance of the excisable goods manufactured was Rs. 17,50,000 (below Rs. 20 lakhs). The court interpreted the notification to mean that all excisable goods, including specified goods, were eligible for exemption upto a limit of Rs. 20 lakhs, while specified goods alone were eligible for exemption upto a limit of Rs. 15 lakhs.
Issues: 1. Whether the petitioner was entitled to exemption from excise duty under Notification No. 80/80-C. E. , dated 19-6-1980, as amended by Notification No. 50/81-C. E. , dated 1-3-1981? 2. Whether specified goods cease to be excisable goods?
Ratio Decidendi: 1. The court held that the petitioner was entitled to the exemption under Notification No. 80/80-C. E. , dated 19-6-1980, as amended by Notification No. 50/81-C. E. , dated 1-3-1981, since the aggregate value of the clearance of the excisable goods manufactured was Rs. 17,50,000 (below Rs. 20 lakhs). The court interpreted the notification to mean that all excisable goods, including specified goods, were eligible for exemption upto a limit of Rs. 20 lakhs, while specified goods alone were eligible for exemption upto a limit of Rs. 15 lakhs. 2. The court held that specified goods did not cease to be excisable goods and remained within the ambit of the definition of "excisable goods" under Section 2 (d) of the Central Excises and Salt Act, 1944.
Final Decision: The court allowed the petition, quashed the orders of the excise authorities denying the exemption, and directed the authorities to refund the excise duty paid by the petitioner under protest.
( 1 ) THIS is an application made by R. K. Chemical Industries Pvt. Ltd. under Article 226 of the Constitution for issuance of a Writ against the Superintendent of Central Excise and the Assistant Collector of Central Excise both of Calcutta-Ill Division fully described in the petition itself for quashing the order dated 30-3-81 No. 20/r. /111/3/81/67 and also order dated 17-11-81 No. C no. V (30) 23-78/3902b mainly on the ground that the same was contrary to the scope of the notification issued from time to time to enlarge the scope of exemption to those who manufacture more than one "excisable goods" falling under more than one items of goods mentioned in the Tariff of the 1st schedule of the notification dated 19-6-80 and also notification dated 1-3-1981 in the ground IV (page 14 of the petition ).
( 2 ) THE petitioner's case is that it is a company incorporated under the Companies Act, 1956, having its registered office at Radhabazar Street, Calcutta. The company manufactures in its factory "starch" falling under Tariff No. 15-C and also gum power falling under Tariff Item 68 (residuary of the first schedule to the Central Excises and Salt Act, 1944 hereinafter referred as the first schedule'.
( 3 ) THE petitioner had the requisite licence and complied with all the provisions of the excise rules and submitted a classification list showing manufactures of the "excisable goods" falling under Tariff items 15-C and 68 of the schedule as required under Rule 173b of the Central Excise Rules, 1944. On ,1st March, 1978 a notification No. 71/78-C. E. , dated 1st March, 1978 was issued by the Government of India and by the said notification goods which were termed as "specified goods" were granted exemption of duty upto Rs. 5,00,000 in any financial year provided inter alia that during financial years subsequent to the financial year 1978-79 the total clearance of such goods for home consumption during the preceding financial year would not exceed Rs. 15,00,000. The relevant notification has been set out at page 5 of the petition. The aforesaid notification was amended in 1979 by Notification No. 141/79-C. E. , dated 30th March, 1979 by inserting a new clause granting exemption of the "excisable goods" cleared by a manufacturer upto the limit of Rs. 20,00,000 for manufecturing "excisable goods" falling under more than one item number of the said "first schedule".
( 4 ) ON 19th June, 1980 another Notification No. 80/80-C. E. , dated 19th June, 1930 was issued by the Government of India in supersession of the earlier :notification No. 71/78-C. E. mentioned hereinbefore but making it clear that it will not apply to a manufacturer who manufacture "excisable goods" upto a limit of Rs. 20,00,000 (aggregate value of clearance for home consumption during the preceding financial year) and Rs. 15,00,000/- for clearance of "specified goods" in case circumstances (pages 7-8 of the petition ).
( 5 ) PETITIONER's contention is that two sets have been notified by the Central Government for the purpose of limit of granting exemption-one is "excisable goods" and another is "specified goods". In the case of a manufacturer manufacturing "excisable goods" more than one item, limit of exemption will be Rs. 20,00,000 and its case is that as the aggregate value of its manufacturing starch and gum power being 172 lakhs that is to say, below Rs. 20 lakhs he ought to have been given exemption and not having been granted exemption the authorities have gone against the express purport and tenor of the said notification thereby falling into lapses and error and the order passed in letter dated 17-11-81 by Assistant Collector, Central Excise Cal. III Division-No. being
( 6 ) THE petitioner's further contention is that the aggregate value of manufacture of starch and gum power was 17 1/2 lakhs (below 20 lakhs) and both are "excisable goods' and that being so exemption should have been granted to the said company as a matter of course in acc
