TMI Blog1984 (12) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... o an earlier order dated 18-11-1980, but it is apparent that the ratio of the Assistant Collector s order was that the 4-harness drill was not controlled drill within the meaning of the aforesaid proviso. 2. Shri K.D. Tayal, SDR, representing the appellant Collector, and Shri J.P. Gupta, Advocate, representing the respondents, addressed us in detail. Both sides filed copies of various notifications which were claimed to have a bearing on the issues involved. Both during the hearing and afterwards we experienced some difficulty in appreciating the facts, because some of the notifications filed on behalf of the appellant Collector were not correctly reproduced, and a number of the notifications filed by Shri Gupta were found in the end to be not relevant to a decision in the matter. In view of this position we are not recapitulating the arguments of both sides as advanced, but setting out the basic issues as they became apparent, and then dealing with the arguments relevant to those issues. 3. The main question involved is whether at the material time, that is, from 1-7-1981 to 19-8-1981, the 4-harness drill which was cleared by the respondents was entitled to a concessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included within the definition of controlled drill . The grounds for this contention are set out below. 6. Notification No. CER/1/68, dated 2-5-1968 of the Textile Commissioner, having reference to price control and issued under Clause 22 of the Cotton Textiles (Control) Order, 1948, prescribed the maximum ex-factory prices of various varieties of cotton fabrics, including controlled drill . The notification included a detailed definition of controlled drill . For our present purpose it is necessary to note only one ingredient of the definition namely the weave of the fabric, which could be either three harness warp or weft faced fabric or four harness warp or weft faced fabric (for convenience, these will be referred to as 3-harness drill and 4-harness drill , respectively). By Notification No. CER/1/69, dated 4-10-1969 of the Textile Commissioner, which took effect from 1-11-1969, the aforesaid notification was amended. One of the amendments was that from the definition of controlled drill , the description of 4-harness drill was deleted. 7. Therefore, the case of the Department in substance is that during the relevant period, namely from 1-7-1981 to 19-8-1981 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 19-9-1969 was issued, the definition of controlled drill in Notification No. CER/1/68, dated 2-5-1968 included 4 harness drill . No doubt with effect from 1-11-1969 4 harness drill was deleted from the scope of Notification No. CER/1/68 through amending Notification No. CER/1/69, dated 4-10-1969 (vide para 6 above). However, the contention of the respondents is that this made no difference to the definition of controlled drill in Notification No. CER/3/69, dated 19-9-1969, because once the definition of controlled drill in the earlier Notification No. CER/1/68, dated 2-5-1968 as in force on 19-9-1969/1-10-1969 (when the later notification came into force) had been incorporated in the later Notification No. CER/1/69, dated 19-9-1969, any further amendments to the earlier notification had no effect on the later notification. As already stated, this latter notification, namely No. CER/3/69, dated 19-9-1969, relating to marking regulations, continued in force up to and beyond the relevant period. 10. In support of his arguments Shri Gupta relied on some authorities relating to the effect of legislation by incorporation as against legislation by reference. He referred, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or legislation by reference, and if it is the former, what is the effect of the incorporation, it would appear that, that question may not arise at all for our consideration, in view of the reasons given below. 13. We have first to observe that, starting from Notification No. 3658, dated 13-10-1964, or perhaps even earlier, there was a series of orders on the subject of stamping of textile fabrics. However, these were in the form of amendments to the Textile Commissioner s Notification No. 80-Tex. I/48(iii), dated 2-8-1948. Notification No. CER/3/69, dated 19-9-1969, on which the respondents are basing their case, was in super session of Notification No. 80-Tex. I/48(iii), dated 2-8-1948. Therefore, with effect from 1-10-1969, on which date Notification No. CER/3/69 came into force, all previous definitions contained in Notification No. 80-Tex. I/48(iii), dated 2-8-1948, whether as they stood originally or as amended, became otiose and ineffective. 14. We have now to see what is the effect of the definition of controlled drill in Notification No. CER/3/69, dated 19-9-1969 on which the respondents have placed heavy reliance. In the first instance, we find that the defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn may be sold ; or (aa) the principles on which and the manner in which such maximum prices may be determined by a manufacturer ; and (b) the marking to be made by a manufacturer or dealer or any class or specification of cloth or yarn manufactured or sold by him and the time and manner of making such markings. Clause 3 of the same Order contains definitions of various terms used therein. Definition (aaa) which was added by Notification No. S.O. 4403, dated 23-9-1975 is also reproduced below :- `(aaa)(i) controlled cloth means any variety or class or specification of cloth for which the maximum prices or the principles on which and the manner in which the maximum prices are to be determined by a manufacturer have been specified by the Textile Commissioner under Clause 22 ; and (ii) non-controlled cloth means any cloth for which the maximum prices or the principles on which and the manner in which the maximum prices are to be determined by a manufacturer have not been specified by the Textile Commissioner under Clause 22. 16. The issue in this case gets narrowed down to the points whether the definition of controlled cloth in proviso (v) to Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpreted and administered by the textile control authorities in the manner advocated by him, that is, whether for purposes of stamping they are administering the definition of controlled drill as different from the definition of controlled drill for the purposes of price control; In the absence of such information we have to reach a conclusion on the basis of our own interpretation of the provisions as placed before us by both sides. 19. Approaching the matter in this light, it appears to us that the introduction of a concept of stamping control would be both unnecessary and anomalous. It is unnecessary because proviso (v) to Notification No. 226/77-C.E can be given a logical meaning without resorting to such a concept. In para 15 above we have reproduced the relevant part of Clause 22 of the Cotton Textiles (Control) Order, 1948, under which all the notifications of the Textile Commissioner have been issued. It will be seen therefrom that this clause makes a distinction between the specification of the maximum prices themselves of any class or specification of cloth, and the specification of the principles on which and the manner in which such maximum prices may be determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 19-9-1969, the expression controlled cloth is clearly defined as referring only to cloth of which the price is either specified in terms or enforced through a formula. We have also seen that when Notification No. CER/3/69, dated 19-9-1969 was issued, it had incorporated the definition of controlled drill appearing in Notification No. CER/1/68, dated 2-5-1968, which by definition was drill which was subject to price control. Thus, to begin with, the notification which was concerned with stamping provided for stamping of only such drill as was subject to price control and no contrary intention was indicated. Shri Gupta sought to persuade us that when an amendment was subsequently made to the definition of controlled drill in Notification No. CER/1/68, dated 2-5-1968, a divergence developed between the price control notification and the stamping control notification and has continued ever since. We have already explained that we cannot think of the stamping requirement being in a vacuum as it were, and divorced from the important question of price control. It is possible to conceive of a situation where divergent meanings are deliberately given. For instance, if instead of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation by incorporation and therefore generally governed by the principle applicable in that situation. Equally, we find that this is a case where the first two exceptions laid down by the Supreme Court are very relevant. Both notifications under consideration, namely CER/1/68, dated 2-5-1968 and CER/3/69, dated 19-9-1969, were issued under the same Clause 22 of the Cotton Textiles (Control) Order, 1948, and relate to the same commodity, namely cotton fabrics. Further, as we have already observed, the requirement of stamping cannot be regarded as an end in itself, but must necessarily have reference to what information is sought to be conveyed by stamping. Thus, the two notifications are clearly in pari materia and should also be considered as supplemental to each other. Therefore, the present is clearly a case where the general rule regarding the effect of legislation by incorporation would not apply, but rather the exceptions thereto. 23. We may add that though the Supreme Court judgment in the case of Mahindra Mahindra Ltd., did not refer to the exceptions to the rule, even in that case the Supreme Court did not take the question as concluded by referring to that rule. Havi ..... 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