- (1.) The petitioner is a soap manufacturer. The petitioner asks for an order directing the opposite parties to refrain from giving effect to the Demand Notices dated the 22nd September, 1956 and 26th October, 1956. By the last notice the petitioner was asked to pay a sum of Rs. 3,954/2/- on account of excise duty in respect of soap delivered from the factory of the petitioner for the period 1st April, 1956 to 30th September, 1956. Previously by its letter dated the 9th March, 1956, the petitioner asked from the Superintendent, Central Excise exemption from Excise Control. By his letter dated the 29th March, 1956, the Superintendent, Central Excise informed the petitioner that its factory could be exempted from the Central Excise control provided the petitioner gives an undertaking that the production during the year would not exceed 200 tons taking into account all varieties of soap manufactured by the petitioner. By its letter dated the 9th April, 1956 the petitioner guaranteed that their production of soap during the year would not exceed 200 tons. In paragraph 5 of the affidavit of Bimal Kanta Ghose it is stated that the petitioner was granted exemption by the Superintendent, Central Excise but it is added that such grant was on a bona fide mistake over-looking the relevant provisions of law. It is common case before me that the question whether the petitioner was entitled to exemption from payment of excise duty during the period in question depends upon a true construction of the Notification dated the 1st April, 1956, which is to the following effect :- S.R.O. 500. - In exercise of the powers conferred by rule 8 of the Central Excise Rules, 1944 as in force in India, and as applied to the State of Pondicherry, the Central Government hereby exempts from the duty leviable thereon :- (1) The first two hundred tons of soap of all kinds cleared for home consumption by any manufacturer on or after the first day of April in each financial year : Provided that the said exemption shall not apply to :- (i) soap, other than household and laundry or toilet (ii) soap, household and laundry or toilet, so cleared in excess of, (a) in the case of soap, household and laundry......125 tons. (b) in the case of soap. toilet........50 tons if in or in relation to any such kind of soap specified in sub-items (a) and (b), any process is ordinarily carried on with the aid of power, or of steam for hearing. (2) soap of all kinds, in or in relation to the manufacture of which no process has been carried on with the aid of power or steam for heating cleared up to a maximum of 20 tons by any manufacturer for home consumption during the month of March 1956. 2. Part (1) of this notification shall take effect on and from the 1st April, 1956."
(2.) The demand notice is in respect of the period April 1, 1956, up to September 30, 1956. It is common case before me that the - petitioner is a manufacturer of soap and that during the relevant period it cleared less than 50 tons of soap of all kinds for - home consumption. Prima facie , therefore, the petitioner comes within the main part of sub-paragraph (1) of the Notification and is entitled to exemption. The proviso to paragraph 1 states that the exemption shall not apply to soap other than household and laundry or toilet. The proviso also states that the - exemption shall not apply to household and laundry soap in excess of 125 tons and toilet soap in excess of 50 tons if in relation to such soap any process is ordinarily carried on with the aid of power or of steam for heating. It is common case before me that the total soap cleared during this period is less than 50 tons. It is also common case before me that the petitioner does not - carry on any process of manufacture with the aid of power or of steam for heating. The notification is issued by the Central Government in exercise of the powers conferred upon it by Rule 8 of the Central Excise Rules, 1944 and has statutory force. The exemption from excise control asked for by the petitioner was granted by the Superintendent of Excise, such exemption was - granted presumably because the Superintendent was satisfied that the petitioner was entitled to the exemption and that the soap cleared by the petitioner was household, laundry or toilet soap. Indeed, in the affidavit filed on behalf of the respondent it is not contended that the petitioner is not entitled to exemption because the soap cleared by it is soap other than household or laundry or toilet. The, modified demand notice is sought to be justified solely on the ground that soft and liquid soap were never exempted from duty as they came within the proviso (i) to the notification which I have read. The parties - have joined issue solely on the question whether - soft and liquid soap comes within the proviso (i) to the notification. I am totally unable to accept the contention of the respondents that soft and liquid soap forms a class by itself or that such class comes within, proviso (i) to the notification soft and liquid soap is not necessarily a soap other than - household or laundry or toilet soap. To give one example, it is well known that one kind of soft and liquid soap is used for purpose of shaving and toilet. In my opinion, therefore, contention raised by the respondents in the second sub-paragraph of paragraph 7 of the affidavit of Bimala Kanta Ghose is without substance.
(3.) I notice that there are several annexures to the affidavit of Bimala Kanta Ghose. Before me, Mr. Mukherjee did not rely upon Annexures B, C or D to the affidavit. It is not contended before me that any of the Annexures to the Affidavit of Bimala Kanta Ghose other than Annexure A has any statutory or binding force. The point in issue, therefore, must be decided solely on the interpretation of the notification S.R.O. 500. On a true interpretation of that notification in the light of events which have happened I have come to the conclusion that the petitioner is entitled to an exemption from payment of excise duty in respect of the soap cleared by it during the period April 1,1956 up to September 30, 1956 and that the original demand notice dated September 22, 1956 as also the modified demand notice dated October 26, 1956 are illegal and invalid.;