TaxTMI 
TaxTMI 
1990 (4) TMI 54
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.... raw materials. `Paper and paper board' are goods falling under item 17(1) of the first schedule to the Act. Two notifications were issued on 1st March, 1984 under rule 8(1) of the Central Excise Rules, 1944 in respect of the above item. The first of them, being Notification No. 24 of 1984, restricted the excise duty on items falling under the aforesaid item in the manner following :- S. No. Description Rate 1. Printing and writing paper. Ten per cent ad valorem paper plus one thousand and five rupees per metric tonne. 2. All sorts of paper commonly known as kraft paper (including paper and paper boards of the type known as kraft liner or corrugating medium) of a substance equal to or exceeding 65 grammes per square metre. Ten per cent ad valorem plus one thousand three hundred and eighty-five rupees per metric tonne. 3. Paper board of the following varieties, namely pulp board, duplex board and triplex board. Ten per cent ad valorem plus one thousand eight hundred and ten rupees per metric tonne. 4. Paper and paper boards, other than those specified in S. Nos. 1 to 3. Ten per cent ad ....
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....eed 16, 500 metric tonnes. (ii) All sorts of paper commonly known as kraft paper (including paper & paper boards of the type known as kraft liners or corrugating medium) of a substance equal to or exceeding 65 grammes per square metre. Rs. 900 per metric tonne. (iii) Others Rs. 1, 120 per metric tonne. 4. [This para, added by Notification No. 92/84 dated 18-4-1984 added another concessional rate where the clearances exceeded 10, 500 but did not exceed 24, 000 metric tonnes on the same lines as above but this does not need to be set out here]". 4. The grant of the above concessional rates were, however, subject to certain important conditions set out in the provisos to the notification. These provisos read : "Provided that the factory does not have a plant attached thereto for making bamboo or wood pulp. Provided further that the exemption contained in this notification shall not apply to cigarette tissue, glassine paper, grease proof paper, coated paper (including waxed paper) and paper of a substance not exceeding 25 grammes per square metre." 5. Another Notification No. 45 of 1985 dated 17-3-1985 has been relied u....
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....used to permit the assessee to avail of this concession in respect of its manufactured goods. This treatment by the Excise Department has also been confirmed by the Central Excise and Gold Control Appellate Tribunal (CEGAT). The Tribunal disposed of the matter very briefly. It observed :- "37. That brings us to the second question whether art paper and chromo paper were eligible for the exemption granted under Notification No. 25 of 1984. We have carefully considered arguments of the appellants. We have perused the Notification No. 24 of 1984 as amended and note that the second proviso excludes from the exemption, among others, coated paper (including waxed paper). There is no denial that art paper and chromo paper are coated papers. It may be correct that these are not, like other papers mentioned in second proviso, industrial varieties of papers and are writing and printing varieties. All the same when the proviso, as it is worded, is clear there is no warrant for us to supply words to the proviso to the notification. We, therefore, find against the appellants in this regard and hold that art and chromo paper would not be eligible for exemption under Notification No. 25 of 198....
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....together the exceptions and there is no conceivable principle other than the one enunciated. The second consideration is the addition of the words used in parenthesis along with `coated paper' viz. "(including waxed paper)". It is pointed out that waxed paper obviously means coated paper because waxed paper is nothing but paper coated with wax and would have anyhow been covered by the exception. Nevertheless, it was considered necessary, it is said, to specifically include it in order to make it clear by this illustration that only industrial paper like waxed paper is taken out from the concession. The words in parenthesis are, in other words, the words illustrative of the limitation to be read into the expression `coated paper'. It is finally argued that, even if the words of the proviso are capable of being construed in a wider manner so as to deny exemption to all kinds of coated paper, the Court should apply the well established principle of construction of taxing statutes that an ambiguous provision should be interpreted in favour of the subject. 7. On the other hand, the learned Solicitor General submits that if there are two possible views of the proviso, the Court should....
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....84 to certain types of papers. It is true that no meticulous reasons can always be made available or discovered for variations in rates of duty as between various types of goods and the absence of some common thread in relation to a set of goods treated alike may not necessarily render the classification irrational or arbitrary. But, at the same time, one can legitimately postulate that the denial of a concession to a group proceeds on the basis of some aspect or feature common to all items in the group. If such a principle can be conceived of which would rationalise the inclusion of all the items, it would be quite reasonable and proper to give effect to a construction of the notification as will accord with that principle. It is this which the appellant has attempted to do and we are inclined to think that the ratiocination of the exceptions suggested, far from being artificial or far-fetched, is a plausible and likely one that the Government could have had in mind and that it should be accepted. 9. As mentioned earlier, the concession of the notification is denied to five kinds of paper. Three of them, undoubtedly and indisputably, are varieties of industrial paper. This is i....
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.... from the concession. We think, therefore, that the appellants are on firm ground in submitting that the expression `coated paper' in the proviso should draw colour from the context in which it is employed and receive an interpretation consistent therewith than its literal one, which in its widest sense, may be comprehensive enough to include all coated paper, industrial or otherwise. 10. The principle of statutory interpretation by which a generic word receives a limited interpretation by reason of its context is well established. In the context with which we are concerned, we can legitimately draw upon the "noscitur a sociis" principle. This expression simply means that "the meaning of a word is to be judged by the company it keeps." Gajendragadkar, J. explained the scope of the rule in State v. Hospital Mazdoor Sabha (1960-2 S.C.R. 866) in the following words : "This rule, according to Maxwell, means that, when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general....
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....t be old machinery in the sense that it has become non-functional or non-usable". In other words, not the mere age of the machinery, which would be relevant in the wider sense, but the condition of the machinery analogous to that indicated by the words following it, was considered relevant for the purposes of the statute. 11. The maxim of noscitur a sociis has been described by Diplock, C.J. as a "treacherous one unless one knows the societas to which the socii belong" (vide : Letang v. Coopex, 1965-1 Q.B. 232). The learned Solicitor General also warns that one should not be carried away by labels and Latin maxims when the word to be interpreted is clear and has a wide meaning. We entirely agree that these maxims and precedents are not to be mechanically applied; they are of assistance only in so far as they furnish guidance by compendiously summing up principles based on rules of common sense and logic. As explained in Collector of Central Excise v. Parle Exports (P) Ltd. - 1989 (38) E.L.T. 741 (S.C.) = (1989-1 S.C.C. 345 p. 357) and Tata Oil Mills Co. Ltd. v. C.C.E. - 1989 (43) E.L.T. 183 (S.C.) = (1989-4 S.C.C. 541 at p. 545-6) in interpreting the scope of any notification, t....