TaxTMI 
TaxTMI 
2002 (5) TMI 61
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....he production of tyres was confined to companies existed thence, which were seven in number. Purported to attract new investment for setting up new tyres industries as also to encourage investment in the existing tyre industries, the Government of India introduced an integrated excise relief Scheme. Pursuant to and in furtherance of the said scheme a Notification bearing No. 198/76 was issued, in terms whereof, tyres were being exempted from payment of so much of excise duty leviable thereon as was in excess of 75% thereof. Relying on and on the basis of the said purported representation the petitioner established a factory. The Scheme was modified by another Notification No. 142/78, in terms whereof, the Central Government granted permission for payment of excise duty in respect of tyres to the extent mentioned therein and subject to the terms and conditions laid down therefor. By reason of the said scheme, those who made substantial investment by way of setting up of a new plant and/or plant of additional capacity became entitled to the benefit thereof. Yet again by reason of the Notification No. l07/81-C.E., dated 24th April 1981, it was provided that the excise relief would be ....
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....nce of the said tyres under the afore-mentioned notification. 8.The petitioner wrote a letter on 5th May, 1981 requesting the Assistant Collector of Central Excise/respondent No. 4 to permit it to avail of the relief under Notification No. 107/81. Permission was granted to the petitioner on 6th May, 1981 by the Assistant Collector to clear tyres under Notification No. 107/81 on provisional basis. The DGTD issued a certificate, to the petitioner on 13th May, 1981 certifying that the petitioner had made a capital investment of the face value of Rs. 3590.44 lacs as on 31st March, 1981 on the plant and machinery for manufacture of tyres. The Assistant Collector passed fresh order for provisional clearance under Rule 9B on 19th May, 1981 and required the petitioner to submit DGTD certificate in original. The petitioner on 21st May, 1981 submitted B-13 bond supported by bank guarantee, pursuant to an order of the Assistant Collector passed in this behalf on 19th May, 1981. However, on 21st May, 1981 the Assistant Collector sent a telegram to the petitioner directing the petitioner to stop clearances under Notification No. 107/81. Assistant Collector on 22nd May, 1981 issued a formal o....
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....II was adjoining the Factory-I of the petitioner. According to the petitioner, they have no other factory, wherefor licence had been granted under Section 13 of the IDR Act other than the said Factory-III. Separate factory licence had also been granted in respect of the said Factory-III. The first classification as also clearances were made from the said Factory-III on 29th March, 1984. 14.A Notification No. 88/84 was issued on 6th April, 1984. By reason of the said notification, the earlier Notification No. 268/82 was substituted on 13th November, 1982. 15.The petitioner claimed exemption in respect of Factory-III in terms of the above said notification. Furthermore, the petitioner had categorically stated that by reason of the letter dated 27th August, 1984 the Commissioner (TR), New Delhi addressed to Shri S.K. Malhi purported to have communicated the views of the Central Government, that, as per sub-clause (2) of the third proviso to the said notification, the industrial undertaking referred to was the petitioner's industry and time-limit for computing the period of availability or the exemption would run from 20th December, 1976. The Collector, Central Excise, Jaipur was....
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.... but as noticed hereinbefore allowed the petitioner to amend the writ petition in the year 1985. In such a situation, in our opinion, it is not desirable to relegate the petitioners to alternative remedy at this stage. 20.The question, as to whether this Court in exercise of its discretionary jurisdiction under Article 226 of the Constitution of India would refuse to entertain a writ petition and relegate the parties to avail alternative remedy, would depend upon the facts and circumstances of each case. There is no proposition of law that in no case, despite existence of an alternative remedy, the writ petition cannot be entertained. Such a course is not normally taken recourse to by the High Court as a matter of prudence and self-restraint. In the instant case, however, the petitioner has questioned the jurisdiction of the authorities, in so far as, it refused to give benefit of the said notifications to them. The jurisdiction of the appropriate authorities would be dependent on the interpretation of the notifications, having regard to the admitted facts. It may be that there exists certain disputed arena as regards the actual amount of excise duty, which the petitioners are l....
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....on. 23.It may be that upon determination of the question the cases are to be remitted back for calculation purposes but we do not see any reason as to why the petitioner should be relegated to an alternative remedy, particularly, when this Court has heard the matters on merits on several dates. 24.The first contention raised by Mr. Maninder Singh, learned Counsel appearing for the respondent/UOI, therefore, is rejected. Re : Territorial25. Jurisdiction It is not in dispute that the petitioner herein had earlier filed a writ petition before the Rajasthan High Court, which was marked as CWP 2012/85 since reported in 1986 Rajasthan L.R. 831 claiming exemption. 26.A learned Single Judge of the Rajasthan High Court held that the Government was bound by the principles of promissory estoppel, and on the basis of the said finding, Notification No. l59/85-C.E., dated 15th July, 1986 was quashed. Union of India preferred an appeal there against and the decision of the Division Bench in Union of India v. J.K. Industries Ltd. since reported in 1990 (49) E.L.T. 511 (Raj.). The Division Bench formulated two questions, which are : (1) Wh....
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....nment had itself issued the impugned Press Note, it was futile to move any revision under Section 36 of the Act before it. The writ is, therefore, maintainable." 32.Yet again in Vareli Weaves Pvt. Ltd. v. Union of India reported in 1996 (83) E.L.T. 255 (S.C.) the Apex Court observed that the circulars upon the basis of which the duty was levied, having been issued in Delhi, the Delhi High Court had the jurisdiction to entertain the writ petition. Re :33. Applicability of Notification No. 107/81, dated 24th April, 1981 Notification No. 107/81-C.E., dated 24th April, 1981 read thus :- "In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts tyres (excluding tubes and flaps), falling under sub-items I and II of Item No. 16 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the specified goods), from so much of the duty of excise leviable thereon as is in excess of the duty calculated at the rate of seventy-five per cent of the rate of duty leviable on the specified goods read with any relevant notification issued under sub-rule (1) of Rule 8 o....
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....fication issued under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 and for the time being in force, shall not be taken into account. Explanation III. - For the purposes of this notification, the "amount of exemption" shall be the difference between the amount of duty payable (including special duty of excise, if any, payable thereon) but for this notification or the aforesaid Notification No. 198/76-Central Excises, or No. 142/78-Central Excises, as the case may be, and the amount of duty paid (including special duty prescribed under this notification or the aforesaid Notification No. 198/76-Central Excises, or No. 142/78-Central Excises, as the case may be, respectively. Explanation IV. - The "amount of duty payable" in Explanation III shall be the amount calculated by applying the rate of excise duty leviable on the specified goods, but for this notification or the aforesaid Notification No. 198/76-Central Excises or No. 142/78-Central Excises, as the case may be, to the assessable value of the specified goods as approved by the proper officer for the purposes of this notification or the aforesaid Notification No. 198/76-Central Excises or No. 142/78-Central Exc....
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....e enactment itself; and (4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision. (Case law discussed)" It is now well settled that an Explanation added to a statutory provision is not a substantive provision in any sense of the term but as the plain meaning of the word itself shows it is merely meant to explain or clarify certain ambiguities which may have crept in the statutory provision. The object of an explanation to a statutory provision is - "(a) to explain the meaning and intendment of the Act itself, (b) where there is any obscurity or vagueness in the main enactment to clarify the same so as to make it consistent with the dominant object which it seems to subserve, (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful, (d) an Explanation cannot in any way interfere with or change the enactment or an....
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....between clearances from a factory and clearances under a certain notification. The notification has to be understood in which context it has been issued, viz., the provision of the Central Excises and Salt Act, 1944 and the rules framed thereunder. There cannot be any clearance under a notification. Upon clearances of the goods the excise duty becomes payable. Only the quantum of the excise duty is leviable under certain notification. Although the question, as to whether when a clearance has been made so as to apply a particular notification laid down the quantum of excise duty may be relevant, in our opinion, the same takes a back seat when the Central Government intended to grant only one time benefit. 38.By using the expression "first clearance" in several provisos it is merely postulated that the application of the impugned notification in relation to the conditions specified therein and the same by no stretch of imagination cannot said to have expanded the scope and purport of the notification. By reason of the Explanation VI, in terms whereof, sum-total of the value of the capital investment made on plant and machinery for the manufacture of the specified goods are to be c....
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....e to any other statute making the provisions of the Central Excises and Salt Act, 1944 and the rules made thereunder applicable to the levy and collection of special auxiliary or any other kind of excise duty levied under such statute, the exemption must be read as limited to the duty of excise payable under the Central Excises and Salt Act, 1944 and cannot cover such special auxiliary or other kind of duty of excise". 43.In Premier Tyres Ltd. v. Collector of Central Excise, Cochin reported in [1987 (28) E.L.T. 58 (S.C.) = (1987) 1 SCC 697] the Apex Court observed : "The notification dated July 14, 1978, it is to be noticed, has superadded the words "read with any relevant notification issued under the said sub-rule (1) of Rule 8 and in force for the time being". These superadded words show conclusively that the notification dealing with exemption to the extent of the duty paid on the inputs, which was already in force, had to be given effect before giving effect to the notification dated July 14, 1978." 44.In Union of India v. Wood Papers Ltd. reported in 1990 (47) E.L.T. 500 (S.C.) the law has been laid down in the following terms : "Literally exemption is freedom fro....
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....fic objective etc. That is why its construction, unlike charging provision, has to be tested on different touchstones. In fact an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to augment State revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly. Truly speaking liberal and strict construction of an exemption provisions are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in the nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction. Therefore, the first exercise that has to be undertaken is if the production of packing and wrapping material in the factory as it existed prior to ....
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....09 (S.C.) the question arose as to whether the word "machine" is to be read as "machines". Keeping in view the fact that, in the event, the word "machine" only is singular and not plural the notification became unworkable. It was observed : "The notification has to be interpreted to give true import and meaning, not to make it purposeless and nugatory. It is well settled which is also provided in Section 13 of the General Clauses Act, 1897 of the Central Acts that unless there is anything repugnant to the subject or context the word singular shall include plural and vice versa. The Tribunal interpreted the word 'machine' to be 'machines' and, in our opinion, rightly so. It seems by this restrictive interpretation the very purpose of this notification since completely diluted which led into clarification/modification by the Government through the aforesaid letter." 51.The said decision again cannot be said to have any application in the instant case. We, therefore, are of the opinion that the contention of the petitioner as regards the interpretation of the Notification 107/81 cannot be accepted. Re :52. Notification No. 88, dated 6th April, 1984 Notification No. 88/84-C....
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....nd machinery in the said factory for the manufacture of tyres prior to the date of the said first clearance of tyres as certified by the Development Officer of the Directorate-General of Technical Development or the General Manager of the Industrial Development Bank of India, and (b) thirty per cent of the sum-total of the value of capital investment made on plant and machinery in the said factory for the manufacture of tyres on or after the date of the said first clearance of tyres but up to the 31st March, 1984 as certified by the Development officer of the Directorate General of Technical Development or the General Manager of the Industrial Development Bank of India; or (ii) as are effected after the expiry of a period of seven years from the date of the said first clearance of tyres from the said factory : Provided also that where such tyres are manufactured in a factory which is an industrial undertaking licensed under Section 13 of the Industries (Development and Regulation) Act, 1951 (65 of 1951) (hereinafter referred to in this proviso as such factory), the exemption contained in th....
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....special duty of excise, if any, paid thereon) at the concessional rate prescribed under this notification or the aforesaid Notification No. 198/76-Central Excises, or No. 142/78-Central Excises, or No. 107/81-Central Excises, or No. 268/82-Central Excises, as the case may be, respectively. Explanation III. - The "amount of duty payable" in Explanation II, - (i) in the case of tyres where duty of excise is chargeable under the Central Excises and Salt Act, 1944 (1 of 1944) with reference to value, shall be the amount calculated by applying the rate of excise duty leviable on tyres, but for this notification or the aforesaid Notification No. 198/76-Central Excise, or No. 142/78-Central Excises, or No. 107/81-Central Excise, or No. 268/82-Central Excises, as the case may be, to the assessable value of the tyres as approved by the proper officer for the purposes of this notification or the aforesaid Notification No. 198/76-Central Excises, or No. 142/78-Central Excises, or No. 107/81-Central Excises, or No. 268/82-Central Excises, as the case may be, respectively; and (ii) in the case of ....
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....ion of an industrial undertaking which has been registered or in respect of which a licence or permission has been issued, or (e) change the location of the whole or any part of an industrial undertaking which has been registered, except under, and in accordance with, a licence issued in that behalf by the Central Government, and in the case of a State Government, except under and in accordance with the previous permission of the Central Government. (2) The provisions of sub-section (2) of section 11 and of section 12 shall apply, so far as may be, in relation to the issue of licences or permissions to any industrial undertaking referred to in this section as they apply in relation to the issue of licences or permissions to a new industrial undertaking. Explanation. - For the purposes of this section, "substantial expansion" means the expansion of an existing industrial undertaking which substantially increases the productive capacity of the undertaking, or which is of such a nature as to amount virtually to a new industrial undertaking, but does not include any such expansion as is norm....
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....IDR Act. Whereas 3rd proviso refers to a factory licensed under Section 13 of the IDR Act. Had the intention of the Government of India been, as has been submitted by Mr. Maninder Singh, that the first proviso lays down the said condition and would cover both Sections 11 and 13 licences, the 1st proviso would become meaningless. The third proviso, therefore, in the context of the second proviso, in the opinion of this Court, must be read as an independent proviso. 61.We may notice that the Government of India while issuing the said notifications in no uncertain terms used the words "such factory" in Clause ii(a) of the third proviso which in the context of the case must be held to be referable to Section 13 factory and not Section 11 factory. Factory under Section 13 of the IDR Act has to be set up, the product is to be manufactured and the clearance would be from that factory and any investment will only be in relation to that factory. As indicated hereinbefore, even in the second proviso, it has clearly been stated, while referring to the earlier Notification No. 107/81, that the amount of exemption would be 30% of the sum-total of the value of the capital investment made on p....