Excise duty exemption classification upheld where narrowing relief to smaller manufacturers was not shown to be arbitrary.

Exemption from excise duty is not an assessee's vested right, and in fiscal policy the court will not examine the wisdom, logic, or equity of the exemption scheme. A notification narrowing exemption to a smaller class of manufacturers was treated as a matter within the legislative or executive domain, and differential treatment of categories was not shown to be arbitrary. The classification was viewed as serving the objective of supporting smaller industries, so the challenge to the reduced exemption failed and the notification was upheld.

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Issues: Whether the reduction of exemption from excise duty granted by notification to a narrower class of small manufacturers was arbitrary and liable to be struck down.

Analysis: Exemption from tax is not a right of an assessee. In fiscal matters, the Court does not test the wisdom, logic, or equity of the taxation policy, and the choice to grant exemption to some categories and not to others lies within the legislative or executive domain. The reduction of exemption was prima facie aimed at supporting smaller industries, and no arbitrariness was shown in the classification or in the narrowing of the exempted class.

Conclusion: The challenge to the notification failed and the reduction of exemption was upheld.

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