The power of exemption under Rule 8(1) of the Central Excise Rules, 1944, is not limited to the process of manufacturing only, and can be exercised with reference to excisable goods.

In this writ petition, the petitioner impugnes the exemption Notification No. 41/81-C.E. dated 1-3-1981 issued by the second respondent pursuant to powers under Rule 8(1) of the Central Excise Rules, 1944, hereinafter referred to as the Rules, the said notification as amended by a subsequent Notification No. 139/81-C.E. dated 2-7-1981 in relation to clauses (i), (v) and (vi) found therein. These clauses relate to the processes of box making, labelling and bandrolling and packaging. The only point urged by Mr. K.P. Jagadeesan, learned counsel for the petitioner, is that the power of exemption under Rule 8(1) of the rules could be exercised only with reference to the process of manufacturing as stated in the impugned Notification No. 41/81-C.E. dated 1-3-1981, and the above processes could not come within the ambit of process of manufacturing and hence the power of exemption was lacking, and on this ground, learned counsel wants this Court to frown upon the said clauses under Article 226 of the Constitution of India. Learned Counsel does not question the constitutional validity of Rule 8(1) in view of the decision of the Supreme Court inOrient Weaving Millsv. Union of India 1963 AIR(SC) 98, 1962 (S3) SCR 481, 1978 (2) ELT 311, 29 CutLT 115. Leanred counsel for the petitioner would contend that the power to exempt must relate to the process of manufacturing and this is exactly re-counted in the impugned Notification No. 41/81-C.E. dated 1-3-1981. This construction on Rule 8(1) of the Rules put forth by the learned counsel for the petitioner could not have the support of the explicit language of the rule. Rule 8(1) of the Rules reads as follows :-

"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" *

.The rule by itself, as we could see from the above extract, does not prescribe any such qualification. It could be with reference to the process of manufacturing and it could also be with reference to very many other contingencies and factors provided the power of exemption is exercised with reference to excisable goods. In the instant case, matches with which alone we are concerned are admittedly excisable goods. Merely because the impugned Notification No. 41/81-C.E. dated 1-3-1981 refers to these processes as having relation to the manufacture of matches, the exercise of power of exemption cannot be struck down on a reasoning that these processes would not amount to manufacturing processes, there could be an exercise of power of exemption under Rule 8(1) of the Rules. Rule 8(1) of the Rules confers wide discretionary powers on the Central Government in the matter of granting exemption. Any particular order of exemption could be questioned only when it is contrary to the provisions of the Central Excises and Salt Act (1 of 1944), hereinafter referred to as the Act, or that the conditions imposed thereunder for getting the concessions are either not germane or foreign to the particular item in respect of which the conditions are imposed or that the conditions are not consistent with the operative provisions of the Act itself. The above is also the view expressed by a Bench of this Court, after adverting to the case law on the question of exemption under the Act and the Rules inJayaprakash Match Works, Kovilpatti and Othersv. Union of India and Others 1983 ELT 58 (Madras)]. Assuming that the processes referred to in the relevant clauses in the impugned Notification No. 41/81-C.E. dated 1-3-1981 would amount to manufacturing processes as in relation to matches, as re-counted in the said notification, yet they could be processes enjoined by the other rules to be adopted for disposal of finished matches, and hence they could not be stated to be wholly not germane or foreign to the excisable item, nameiy, matches.

2.Mr. T.Somasundaram, l