TMI Blog1990 (4) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... Union Government has challenged correctness of construction by High Court of Gujarat of Notification No. 163 of 1965 issued under Rule 8 framed under Central Excises and Salt Act allowing exemption to all sorts of papers by "any factory commencing production" to refer "not to the production of excisable goods - paper in general falling under Item 17, but to production of these specified exempted categories of paper in Column 2 of this notification" and canvasses for acceptance of the construction put on it by the Collector, Central Excise "that the factory must have commenced production on or after that date and not that the production of these items must have been commenced after the date". 2. M/s. Arvind Boards Papers Products Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditional i.e. it is applicable to paper produced in a factory which commenced production on or after a specific date. Therefore, the condition is that the factory must have commenced production on or after that date and not that the production of these items must have been commenced after that date." The High Court did not agree with the construction of the Notification made by the Collector (Appeal) and held :- "That is why the whole controversy has arisen as regards these key words "commencement of production". On a plain literal construction, bearing in mind the context of the exemption, where only certain specified categories of paper which is excisable item as specified in Column 2 had been exempted, it is obvious that the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the 1st April 1961. Any factory which commenced production on or after the 1st April, 1961 but before the 1st March 1964. Any factory commencing production for the first time on or after the 1st March 1964, or any factory existing immediately before the 1st March 1964, whose production capacity has been enlarged and brought into operation on or after the 1st March, 1964 to the extent such production is attributable to the enlarged capacity. During the first 12 months of the commencement of production. During the second 12 months of the commencement of production. During the period subsequent to the first 24 months of the commencement of production. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 1964 is covered in the notification. 3. From the table extracted above it is clear that it is in two parts and exemption is allowable in the first part to the factory commencing production on or after 31st March, 1964, and in the second part to the existing factory to extent of enlarged capacity. If the first part is read in isolation it is susceptible of construction as was adopted by the High Court. But the notification has to be read in its entirety and construed as a whole. Once that is done cloud of uncertainty disappears. A close reading of both the parts together leaves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st March 1964. Any other construction shall result in discrimination. A factory like respondent existing from 1942 producing straw board and mill board shall be entitled to exemption on production of wrapping and packing paper on construction of the expression `commencing production' by the High Court even though it switched over from straw board and mill board to packing and wrapping paper after the relevant date whereas another unit existing and producing wrapping and packing paper itself from before 1st March 1964 could not be entitled to exemption except to the extent of enlarged capacity. That is if an existing unit would have installed a new machinery it would have been entitled to exemption of production only to that extent whereas a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression `equal to the amount of rent payable for a year' did not `warrant the inference that the benefit of exemption' could `be claimed only once' because the amount of rent which was sought to be deducted in more than one year was found squarely to fall in Item 30 of notification. It was again a case of interpreting an exemption notification at later stage. Recently in Tata Oil Mills Co. Ltd v. Collector of Central Excise - 1989 (43) E.L.T. 183 (S.C.) = 1989 (4) SCC, 541; exemption was to soap made from indigenous rice bran oil as against edible oil. The assessee was engaged in manufacture of soap from rice bran fatty acid which was extracted from rice bran oil, in assessee's factory. It was found rice bran oil as such could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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