TaxTMI 
TaxTMI 
1985 (10) TMI 178
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the manufacture of R.C.C. cement pipes and other allied products. The production in the Hubli factory started in the year 1960 and in Goa unit in the year 1971. In the Hubli factory the petitioner had employed more than 49 workers, and in Goa, it was less than 49 during the relevant period. 3.  The Government of India issued a Notification No. 54/1975 dated 1st March, 1975 in exercise of its powers under Rule 8(1) of the Central Excise Rules, 1944 ('Rules') which reads as follows:- "In Exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts all goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and produced in any factory, including the precincts thereof, whereon not more than forty-nine workers are working, or were working without the aid of power, on any day of the preceding twelve months, from the whole of the duty of excise leviable thereon." As per this notification the clearance made from the Goa Factory was exempted from levy of excise duty since the Goa factory had employed less than 49 workers. But so far as Hubli factory is c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e show-cause notice and obtained an order of stay of further proceedings. 6.  The question that arises for consideration is; Whether in view of the Notification 176/77, the petitioner would be liable to pay excise duty on the excisable goods cleared by it from its two factories between 18-6-77 and 31-3.1978 ? The petitioner's contentions are:- (i) That the goods manufactured and cleared from the Goa factory had been exempted from duty applying Notification 54/75 ; (ii) That the value of clearances made from the Hubli factory did not exceed Rs. 30 lakhs during the relevant preceding financial year; and (iii) That therefore the 1st respondent was not right in proposing to club the value of goods cleared by him from both the factories for the purpose of the application of the notification 176/77. Elaborating his contentions, Sri Chander Kumar, learned Counsel for the petitioner, has submitted that having regard to the fact that the goods cleared by the petitioner from its Goa factory had been exempted from payment of excise duty under the Notification 54/75, they were not 'excisable goods' within the meaning of the said term as defined under Section 2(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icense for manufacturing ice, since the same was exempted from levy of excise duty by virtue of a notification issued by the Government under Rule 8(1) of the Act. In the decision rendered by Delhi High Court in Sulekaram & Sons v. Union of India [1978 ELT (J 525)] it was held that reading the exemption notification along with the Act, the effect is that goods manufactured by the petitioner therein, were taken out of the First Schedule and therefore were not 'excisable goods' within the meaning of S. 2(d) of the Act. This decision has since been overruled in Vishal Andhra Industries v. Union of India [1983 ELT 2265 (Delhi)]. 8.  Sri Bhat has argued that on a correct interpretation of the notification, the clearances made by the petitioner from his two factories during the relevant period would be exigible to duty. Dealing with the definition 'excisable goods' under the Act, Sri Bhat has submitted that it is only descriptive of the goods which are being subjected to duty. All excisable goods are subjected to levy under the charging Sec. 3 at the rates set forth in the First Schedule. The Government of India may, by a notification issued under Rule 8 exempt, subject ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... same principle and held: "......the levy and exemptions are parts of the same scheme of taxation. The two together carry into effect the purpose of the legislation. For finding out the true scheme of a taxing measure, we have to take into consideration not merely the levy but also the exemptions granted." 10.  In the decisions relied upon by Sri Shivashankar Bhat, namely of : (i) Allahabad ; (ii) Andhra Pradesh and (iii) Madras, High Courts their Lordships, on a detailed examination of the definition of 'excisable goods' vis-a-vis the schedule and effect of notifications issued under the Act, have taken a uniform view that even though the excisable goods are exempted from excise duty by virtue of notifications issued by the Central Government, they do not cease to be 'excisable goods'. 11.  I am of the opinion that the view expressed in the above said decisions clearly support the contention of the Union of India. The character of a product, as excisable goods, does not depend upon the actual levy of duty, but depends on the description as 'excisable goods' as contained in the First Schedule to -the Act. 'Excisable goods' is defined in Sec. 2(d) of the ....