The Central Government has the power to impose conditions for grant of exemption from excise duty on excisable goods under Rule 8 of the Central Excise Rules, 1944, and such conditions can be based on factors that are relevant to the purpose of exemption.

V. RAMASWAMI J.

In this batch of writ petitions the validity of Notification No. 137 of 1981, Central Excise, dated 2-7-1981, issued by the Central Government in exercise of their powers under Rule 8(1) of the Central Excise Rules, 1944 giving exemption to a limited extent in respect of excise duty leviable on certain conditions is questioned. In Form the petitioners have prayed for a writ of Mandamus directing the Union of India and the Superintendent of Central Excise to forbear from collecting excise duty on matches in excess of that which is payable under Notification No. 42 of 1981. All these petitioners are manufacturers of matches without the aid of power who may be hereafter designated as non-mechanised sector manufacturers. In order to appreciate the point raised in these writ petitions, it is necessary to set out the Notification which have a relevance to the question. Notification No. 42 of 1981 issued under rule 8 reads as follows :-

"GSR....In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts matches in or in relation to the manufacture of which none of the following mechanical prccessess, namely :-

(i) box making;

(ii) frame filling;

(iii) dipping of splints in the composition for match heads;

(iv) filling of boxes with matches;

(v) labelling and banderolling; and

(vi) packaging,

is ordinarily carried on with the aid of power, falling under Item No. 38 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and cleared for home consumption by a manufacturer from so much of the duty of excise leviable thereon as is in excess of Rs. 4.50 per gross boxes 2 of 50 matches each:Provided that-

(i) in the case of matches packed in boxes in which both the outer slide as well as the inner slide are made of cardboard, the amount of exemption shall be increased by sixty paise per gross of boxes;

(ii) in the case of matches packed in boxes in which the inner slide alone is made of cardboard, the amount of exemption shall be increased by twenty four paise per gross of boxes;

(iii) the amount of exemption shall be increased, or further increased, as the case may be, by fifty paise per gross of boxes if bamboo is used for the splints or for both splints and veneers;

(iv) if the splints of such matches are made of bamboo and the matches are packed in boxes of 40s, the rate of duty shall be four fifths of the rate applicable to matches of general description produced in the same factory but packed in boxes of 50s and if some packing in boxes of 50 is not done, it shall be four-fifths of the notionally determined rate for matches packed in boxes of 50s.

2. This notification shall come into force on the 1st day of April, 1981.'

This Notification was amended by Notification No. 140 of 1981, dated 2nd July, 1981 which reads as follows :-" *

GSR....In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby makes the following further amendments in the Notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 42/81-CE, dated the 1st March, 1981, namely:-

In the said Notification :

(1) before clause (ii), the following clause shall be inserted, namely :-

(i) the process of giving the veneer flats or strips the configuration of a match box including the outer slide or the inner slide with the use of match paper,(ii) for clauses (v) and (vi), the following clauses shall be substituted, namely :-

"(v) the process of affixing labels, by pasting or any other means on match boxes or veneers;

(vi) banderolling; and

(viii) packaging;'

(2) In the first proviso -

(a) clauses (i) and (ii) shall be omitted; and

(b) in clause (iii), the words "or further increased as the case may be" shall be omitted;

(3) after the first proviso, the following proviso shall be inserted, namely :-" *

Provided further that nothing contained in this notification shall app]y to ma