TaxTMI 
TaxTMI 
1980 (8) TMI 84
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....he Government of India in exercise of the powers conferred upon it by Rule 8(1) of the Central Excise Rules, 1944. The Superintendent of Central Excise, however, rejected the claim for exemption on the ground that though the powerlooms owned by each of the respondents were not more than 4, manufacture of cotton fabrics on them had started after 1st April, 1961 and none of the respondents was, therefore, entitled to exemption from payment of excise duty on the cotton fabrics manufactured by him. The excise duty was accordingly levied on each of the respondents by the Superintendent of Central Excise and this levy was confirmed in appeal by the Assistant Collector and in further appeal by the Collector of Central Excise. Each of the respondents thereupon preferred a writ petition in the Karnataka High Court challenging the levy of excise duty and praying that a writ of mandamus may be issued against the Excise Authorities directing them not to enforce the notice demanding excise duty. The writ petitions were allowed by the High Court and hence the Union of India preferred the present appeals after obtaining special leave from this Court. 2. Before we proceed to examine the rival c....
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....y a notification issued by the Central Government on 1st March, 1961 and the then existing Item 7 was substituted by the following Item : "(7) Cotton fabrics manufactured by or on behalf of the same person in one or more factories commonly known as powerlooms (without spinning plants) in which less than 3 powerlooms in all but not roller locker machine are installed." The result was that the exemption granted under Item 7 was considerably narrowed down and the proviso taking away the exemption in certain cases was deleted. But again, by a notification dated 1st April, 1961, the Central Government introduced the following proviso under Item 7: "Provided that this exemption shall not be applicable to a manufacturer who commences production of the said fabrics for the first time on or after the 1st April, 1961 by acquiring powerlooms from any other person who is or has been a licensee of powerloom factory." Thus from 1st March, 1961 the benefit of the exemption from excise duty was available only to those manufactures who had not more than 2 powerlooms in all in their factories and from and after 1st April, 1961 even this limited exemption was withdrawn from manufacturers ....
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.... issued by the Central Government on 18th March, 1961 and the new rates were Rs. 10/- and Rs. 12.50 in respect of the first 4 powerlooms and Rs. 20/- and Rs. 25/- in respect of the balance. The first proviso dealing with the case where roller locker machines where employed however, remained unchanged. Then came another notification of the Central Government dated 1st April, 1961 by which the notification dated 18th March, 1961 was amended by substituting the words "where more than 2 but not more than 24 powerlooms are employed" by the words "where not more than 24 powerlooms are employed" and adding a further proviso (hereinafter referred to as the third proviso) after the existing first Proviso: "Provided also that where a person commences manufacture of the said fabrics for the first time on or after the 1st April, 1961, by acquiring powerlooms from any other person who is, or has been, a licensee of powerloom factory, the rate per shift, per month, per powerloom shall be the next higher rate, if any." 6. This was followed by a notification dated 20th April, 1961 issued by the Central Government by which after the first proviso, the following proviso (hereinafter referred t....
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.... exempt from payment of excise duty, but was liable to pay the same at the next higher rate provided in the amended notification dated 18th March, 1961. 7. Now going back to the proviso under Item 7 of the notification dated 5th January, 1957, we find that the language of this proviso is clear and explicit and does not admit of any doubt or equivocation. It says in so many terms that the exemption under Item 7 shall not be applicable to a manufacturer who has commenced his production of cotton fabrics for the first time on or after 1st April, 1961 by acquiring powerlooms from another person who is or has been a licensee of powerloom factory. There are two conditions which must exist before the mischief of the proviso is attracted. One is that the manufacturer must have commenced production of cotton fabrics for the first time on or after 1st April, 1961 and the other is that the powerlooms on which he manufactures cotton fabrics must have been acquired by him from a person who is or has been a licensee of powerloom factory. It is clear on a plain grammatical construction that the prescription of the date, 1st April, 1961, has reference only to commencement of production of the c....
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....certain intention, but one of these expressions conveys that intention less clearly than the other, it is proper to conclude that if the craftsman used that one of the two expressions which would convey the intention less clearly, he does not intend to convey that intention at all. Moreover, here the dictates of grammar as well as language compel us to take the view that the date 1st April, 1961 has reference only to commencement of production and not to acquisition of the powerlooms. It is to our mind clear that if a manufacturer is found to have commenced production of cotton fabrics on powerlooms for the first time on or after 1st April, 1961, he would fall within the mischief of the proviso and it would be entirely immaterial as to when he acquired the powerlooms, whether before or after 1st April, 1961, so long as the powerlooms are acquired from a person who is or has been a licensee of powerloom factory. The High Court was, therefore, clearly in error in construing the language of this proviso to mean that the powerlooms also must have been acquired by the manufacturer on or after 1st April, 1961 in order to attract the applicability of the proviso. 8. The same constructi....