1988 (7) TMI 63 - HC - Central Excise

Summary

Issues:
Construction of Notification No. 33/81 under Rule 8 of Central Excise Rules, 1944

Detailed Analysis:

1. Background and Appeal: The appellants, manufacturers of lead products, imported lead scrap under Notification No. 33/81. The Customs Authorities rejected refund applications, leading to Writ Petition No. 2755 of 1982. The Single Judge dismissed the petition, prompting the present appeal.

2. Appellants' Contentions: Mr. Talyarkhan argued that the lead scrap imported falls under Clause (b) of the Notification, entitling them to exemption from excise duty. He emphasized the disjunctive nature of Clauses (a) and (b) based on the use of the word 'or' between them.

3. Notification Examination: The Notification exempts waste or scrap of copper, zinc, aluminium, and lead from excise duty. Clause (a) requires duty payment for specific items, while Clause (b) grants exemption regardless of prior duty payment, as it includes products not under specified items.

4. Interpretation of Clauses: Clauses (a) and (b) are distinct and complete, with the word 'or' emphasizing their separate application. The term 'said' in Clause (b) refers to the nature of lead in the notification, not specific items under Clause (a).

5. Judicial Analysis: The Court rejected the argument that Clause (b) should mirror the duty payment requirement of Clause (a). The Notification's plain reading supports exemption for lead scrap falling under Clause (b, irrespective of prior duty payment.

6. Legal Precedent: The Court cited legal principles that tax exemptions are based on the language of the law, not intentions. Referring to Hansraj Gordhandas case, the Court emphasized adherence to the notification's terms for granting exemptions.

7. Alternative Submission: An alternative argument regarding lead scrap arising from obsolete goods was not pursued, citing a Supreme Court decision. The Court allowed the appeal, setting aside the Single Judge's order and directing refund with reduced interest.

8. Conclusion: The Court allowed the appeal, restoring the Writ Petition and ordering the Department to refund excise duty with interest. No costs were awarded in the matter.

This detailed analysis of the judgment highlights the construction of the Notification, the arguments presented by the parties, the Court's interpretation, and the legal principles guiding the decision.