The KVIC does not have the power to prescribe conditions relating to output or other matters which are not relevant to the determination of the bona fide nature of a unit. A Government Order imposing a ceiling on production and other conditions for membership in Co-operative Societies is contrary to the Notification itself and amounts to discrimination.

V. RAMASWAMI, J

The petitioners in this batch of writ petitions are small scale match manufacturing units who are not given the benefit of Notification GSR No. 99 of 1980-Central Excise, dated 19-6-1980. They have prayed for a writ of mandamus or any other Writ or appropriate direction directing the respondents to give the benefit to them of the said Notification without reference to the first and the second provisos to the said Notification by reason of which the Petitioners were not able to claim the concession. Section 3 of the Central Excises and Salt Act, 1944 imposes excise duty on manufacture in respect of items mentioned in the First Schedule to the Act. Matches are mentioned in Item No. 38 of the Schedule and the duty is leviable on the manufactured matches at the rates specified therein. In exercise of the rule-making powers under the Act, the Central Government have made the Central Excise Rules, 1944. Rule 8 provides that 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. In exercise of this power, the Central Government were prescribing from time to time lower rates than those prescribed under Item 38.

2.Prior to 1967, for the purpose of levy of excise duty, match factories were classified on the basis of their production during the financial year and matches produced in different factories were subjected to varying rates of duty a higher rate being levied on matches produced in factories having higher output. This classification thus was not on any technological differences but on the basis of output. There were four classes, namely, 'A', 'B', 'C' and 'D'- 'A' class comprising factories whose annual output exceeds 4, 000 million match sticks, 'B' class comprising factories whose annual output exceeds 500 million match sticks but does not exceed 4, 000 million match sticks, 'C' class comprising factories whose annual output exceeds 50 million match sticks but does not exceed 500 million match sticks and 'D' class comprising factories whose annual output does not exceed 50 million match sticks. In 1967, the classification of match factories on the basis of production was abandoned and they were classified from the point of view of manufacturing technique and accordingly they were grouped into two distinct categories, one mechanised unit and the other non-mechanised unit. It may be mentioned at this stage that all mechanised units were producing more than 4, 000 million match sticks per year. Accordingly only mechanised units were falling under class 'A'. All non-mechanised units have to be grouped under the earlier categorisation on the basis of output coming under 'B', 'C' and 'D' classes. By Notification No. 115 of 1967, dated 8th June 1967, a rate of Rs. 4.60 per gross of boxes of 50 matches each was prescribed for matches manufactured in mechanised units and Rs. 4.30 was fixed per gross of boxes of 50 matches each produced in non-mechanised units. There was a proviso to this Notification which read as follows :

"Matches referred to in category 2 and cleared for home consumption during the financial year from a factory from which the total clearance of matches during that year is not, as per declaration made by the manufacturer under this notification, estimated to exceed 75 million matches, shall be allowed to be cleared at the rate of Rs. 3.75 per gross of boxes matches each, up to 75 million matches and the quantity of matches, if any, cleared in excess, and up to 100 million matches shall be allowed to be cleared at the rate of Rs. 4.30 per gross of boxes of 50 matches each; and if the clearance in such factory exceeds 100 million matches during the financial year, the manufacturer shall be required to pay at the rate of Rs. 4.30 per gross of boxes of 50 matches each, on the entire quantity cleared during the fi