TMI Blog1986 (8) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excises and Salt Act, 1944 and are not entitled to claim any exemption in respect of special duty of excise or additional duty of excise or auxiliary duty of excise. - 415-419 of 1983 and 498 of 1983 - - - Dated:- 18-8-1986 - Bhagwati, C.J., V. Khalid and G.L. Oza, JJ. [Judgment per : Bhagwati, C.J.]. - These appeals and writ petition raise a short question of the construction of the expression `duty of excise' employed in two Notifications issued by the Government of India under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, one bearing No. 123/74-C.E., dated 1st August 1974 and the other bearing No. 27/81-C.E., dated 1st March 1981. The question is whether this expression is limited in its connotation only to basic duty of excise levied under the Central Excises and Salt Act, 1944 or it also covers special duty of excise levied under various Finance Bills and Acts, additional duty of excise levied under the Additional Duty of Excise (Goods of Special Importance) Act, 1957, and any other kind of duty of excise levied under a Central enactment. If this question is decided in favour of the assessee and it is held, accepting the contention of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in the Official Gazette, exempt (subject to such conditions as may be specified in the notification) any excisable goods from the whole or any part of duty leviable on such goods. (2) The (Central Board of Excise and Customs) may by special order in each case exempt from the payment of duty, under circumstances of an exceptional nature, any excisable goods". 3. The word "duty" for the purposes of these Rules is defined in clause (v) of Rule 2 to mean "the duty payable under Section 3 of the Act" and obviously therefore the exemption which the Central Government can grant by issuing Notification under sub-rule (1) of Rule 8 can only be from the whole or any part of the duty of excise payable under Section 3 of the Central Excises and Salt Act, 1944. 4. It seems that the Central Government issued Notifications from time to time under sub-rule (1) of Rule 8 exempting various categories of excisable goods from the whole or any part of the excise duty leviable on such goods. So far as tyres are concerned, a Notification bearing No. 123/74-C.E., dated 1st August, 1974 was issued by the Central Government exempting tyres for motor vehicles from a part of the excise duty leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cease to have effect after the 31st day of March 1980, except as respects things done or omitted to be done before such cesser and Section 6 of the General Clauses Act, 1897, shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act. (3) The special duties of excise referred to in sub-section (1) shall be in addition to any duties of excise chargeable on such goods under the Central Excises Act, or any other law for the time being in force. (4) The provisions of the Central Excises Act and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the special duties of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules as the case may be. The Finance Acts from 1973 to 1976 also levied auxiliary excise duty on various categories of excisable goods including tyres but the levy of auxiliary excise duty was discontinued with effect from 1977 and we are, therefore, not concerned with it so far as the present appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties of excise levied under the Central enactment. The Central Government was of the view that the Delhi High Courts judgment was erroneous and it accordingly preferred the present appeals after obtaining special leave from this Court. Meanwhile, Parliament also enacted the Central Excise Laws (Amendment and Validation) Act, 1982 laying down statutory rules which should guide the court in interpreting Notifications granting exemption from payment of duty of excise and prescribing the conditions on which a notification granting exemption from payment of duty of excise can be construed as applicable to duty of excise levied under any Central law making the provisions of the Central Excises and Salt Act, 1944 and the Rules made thereunder applicable to the levy and collection of duty of excise under such Central law. Since this enactment had the effect of limiting the interpretation of the expression `duty of excise' in the two Notifications dated 1st August 1974 and 1st March 1981 to the basic duty of excise levied under Central Excises and Salt Act, 1944 and excluding from its coverage special duty of excise levied under various Finance Acts, the assessee filed the present writ peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cises and Salt Act, 1944" or "duty of excise leviable..... under the said Act" as in the Notification No. CER-8(2)/55-C.E., dated 17th September, 1955, Notification No. 255/77-C.E., dated 20th July, 1977, Notification No. CER-8(1)/55-C.E., dated 2nd September, 1955, Notification No. CER-8(9)/55-C.E., dated 31st December, 1955, Notification No. 95/61-C.E., dated 1st April 1961, Notification No. 23/55-C.E., dated 29th April 1955 and similar other notifications. But, here said the respondents, no such words of limitation are used in the two notifications in question and the expression "duty of excise" must, therefore, be read according to its plain natural meaning as including all duties of excise, including special duty of excise and auxiliary duty of excise. Now, it is no doubt true that in these various notifications referred to above, the Central Government has, while granting exemption under Rule 8(1), used specific language indicating that the exemption, total or partial, granted under each such notification is in respect of excise duty leviable under the Central Excises and Salt Act, 1944. But, merely because, as a matter of drafting, the Central Government has in some notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enacted from year to year. It is therefore difficult to understand how the expression `duty of excise' in the Notification dated 1st August 1974 could possibly be read as comprehending special duty of excise which did not exist at the date of this notification and came to be levied almost four years later. When special duty of excise was not in existence at the date of this notification, how could the Central Government, in issuing this notification, have intended to grant exemption from payment of special excise duty? The presumption is that when a notification granting exemption from payment of excise duty is issued by the Central Government under Rule 8(1), the Central Government would have applied its mind to the question whether exemption should be granted and if so to what extent. And obviously that can only be with reference to the duty of excise which is then leviable. The Central Government could not be presumed to have projected its mind into the future and granted exemption in respect of excise duty which may be levied in the future, without considering the nature and extent of such duty and the object and purpose for which such levy may be made and without taking into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excises and Salt Act, 1944. The argument of the respondents based on this premise was that the reference to Rule 8(1) as the source of the power under which the notifications dated 1st August, 1974 and 1st March, 1981 were issued could not therefore be relied upon as indicating that the duty of excise from which exemption was granted under these two notifications was limited only to the duty of excise payable under the Central Excises and Salt Act, 1944 and the expression `duty of excise' in these two notifications could legitimately be construed as comprehending special duty of excise. This argument is, in our opinion, not well-founded and cannot be sustained. It is obvious that when a notification granting exemption from duty of excise is issued by the Central Government in exercise of the power under Rule 8(1) simpliciter, without anything more, it must, by reason of the definition of `duty' contained in Rule 2 clause (v) which according to the well-recognised canons of construction would be projected in Rule 8(1), be read as granting exemption only in respect of duty of excise payable under the Central Excises and Salt Act, 1944. Undoubtedly, by reason of sub-section (4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the statute levying special duty of excise or additional duty of excise by which the provisions of the Central Excises and Salt Act, 1944 and the Rules made thereunder including those relating to exemption from duty are made applicable. Moreover the exemption granted under all these notifications specifically refers to special duty of excise or additional duty of excise, as the case may be. It is, therefore, clear that where a notification granting exemption is issued only under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 without reference 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. The notifications in the present case were issued under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 simpliciter without reference to any other statute and hence the exemption granted under these two n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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