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TMI Blog1991 (6) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... factories located at Kalol and Kandla in the State of Gujarat. It is a joint sector public undertaking. The Central Government has substantial interest in this undertaking. 4.In 1974 the Government of India introduced a scheme designed to ensure a uniform price of fertilizers at the point of sale to farmers throughout the country. In furtherance of the scheme, a fund in the name and style of the Fertilizers Pool Equalization Fund was created. The manufacturers of fertilizers were required to credit into this fund certain amounts notified from time to time as Fertilizer Pool Equalisation Charge on clearance of specified fertilizers effected by them. The entire scheme, including this fund, was administered by the Ministry of Agriculture. 5.In exercise of its power under Rule 8(1) of the Rules, the Central Government issued one Notification bearing No. 108 of 1974-C.E., dated 20th June, 1974 exempting from payment of excise duty on fertilizers equivalent to the amount payable by the manufacturer in the aforesaid fund. A copy of this Notification is annexed as Annexure `A' to each petition. Under that Notification it was provided that in order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the periods from April, 1975 to November, 1976. It may be mentioned at this stage that the facts of giving of undertaking by the petitioner to the effect that it would credit the amount in the aforesaid fund and payment of the undertaken amount in the fund are not in dispute between the parties. It is also not in dispute that the proof of payment in the aforesaid fund made by the petitioner in terms of its undertaking at the time of clearance of its fertilizers during the relevant period was not furnished within the stipulated time-limit. The petitioner caused reply to the above-referred show cause notices. Its explanation for not furnishing the proof of payment within the stipulated time-limit was not accepted and the excise duty payable by it on the fertilizers cleared by it was levied for the periods mentioned in different show cause notices. Copies of the orders in original are annexed as Annexure `C' to each petition. The petitioner's challenge to the orders in original in appeal failed. A copy of the order of the appellate authority is annexed as Annexure `D' to each petition. The petitioner's approach to the revisional authority partly succeeded. The Central Government exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o avail the exemption granted thereunder. 8.Even at the cost of repetition it may be mentioned that under the Notification at Annexure `A' what was required to be done by the petitioner, in order to earn the exemption thereunder, was to give an undertaking at the time of clearance of the concerned fertilizers to the effect that it would credit the specified amount in the aforesaid fund in accordance with the directions issued by the Central Government and to produce within sixty days of the clearance of the said fertilizer sufficient proof to the satisfaction of the proper officer that the amount was so credited. These conditions postulate three contingencies : (i) giving of the undertaking at the time of clearance for crediting the specified amount in the aforesaid fund, (ii) payment of such amount in the aforesaid fund in terms of the undertaking, and (iii) furnishing proof of such payment within sixty days of the date of clearance of the said fertilizer. It needs no telling that, if the petitioner fulfilled these three conditions, it would be entitled to earn exemption under the said Notification at Annexure `A'. So far as the fulfilment of first two conditions is concerned, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion which results in inequitable results and is incongruous is to be avoided." It is thus clear that an exemption Notification has to be construed in the light of the contents thereof. As aforesaid the Notification at Annexure `A' postulates three conditions for earning the exemption provided thereunder. The first two conditions have to be complied with in full in order to earn the exemption thereunder. Payment of contribution in the aforesaid fund is a condition precedent for claiming the exemption thereunder. The goods would not be allowed to be cleared unless undertaking to the effect of payment of contribution in the fund is given. The condition of giving undertaking will have also therefore to be treated as a condition precedent. So far as furnishing of proof is concerned, it is not always possible to comply with it fully within the stipulated time-limit for diverse reasons. It may be noted that such proof has to be furnished to the satisfaction of the proper officer. It is possible that the proof of payment furnished by the manufacturer may not be to the satisfaction of the proper officer and in order to furnish such satisfactory proof, the stipulated time-limit may prove s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be in the nature of a procedural part. The third condition in the Notification at Annexure `A' would thus constitute a procedural part. This procedural part would require liberal construction. Substantial compliance of the third condition, being the procedural part of the Notification at Annexure `A' should be sufficient to earn the exemption thereunder. This interpretation of the Notification at Annexure `A' by us is in consonance with the aforesaid ruling of the Supreme Court in Wood Papers Ltd.'s case (supra). 11.We should like to make it clear at this stage that this interpretation of ours need not and should not mean to allow the manufacturer to claim the exemption under the Notification at Annexure `A' even if he remains negligent in furnishing the proof of payment of the specified amount in the aforesaid fund within the stipulated time-limit. The exemption thereunder can be availed of for belated production of proof by such manufacturer for the reason or reasons beyond his control. 12.The learned Counsel for the respondents has invited our attention to the ruling of the Supreme Court in the case of Hansraj Gordhandas v. H.H.Dave, Collector of Central Excise and Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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