UNION OF INDIA MODI RUBBER LIMITED Vs. MODI RUBBER LTD

JUDGEMENT

(1.) 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 R. 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 198 1. 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, that the expression "duty of excise" in the two Notifications is not confined only to the basic duty of excise levied under the Central Excises and Salt Act, 1944 but also comprises special duty of excise, additional duty of excise or any other kind of duty of excise, a further contention is raised on behalf of the assessee challenging the constitutional validity of the Central Excise Laws (Amendment and Validation) Act 1982 by which Parliament sought to lay down certain statutory rules for interpretation for arriving at the true meaning and content of the expression "duty of excise" in the Notifications issued under sub-rule (1) of Rule 8 of the Central Excise Rules 1944 and which consequentially had the effect of restricting the meaning and connotation of the expression "duty of excise" in the two Notifications in question to basic duty of excise levied under the Central Excises and Salt Act, 1944. The facts giving rise to these appeals and writ petition are few and may be briefly stated as follows.

(2.) The assessee in these appeals and writ petition is a limited company which manufactures tyres. The manufacture of tyres is subject to duty of excise under the Central Excises and Salt Act, 1944. Section 3, sub-sec. (1) of this Act provides that there shall be levied and collected in such manner as may be prescribed by Rules made under the Act duties of excise on all excisable goods other than salt which are produced and manufactured in India as and at the rates set forth in the First Schedule. The First Schedule enumerates various items of goods which are liable to duty of excise and also sets forth the rate at which the duty of excise shall be charged on those goods. Item 16 in the First Schedule reads:

(3.) The word "duty" for the purposes of these Rules is defined in Clause (v) of Rule 2 to mean "the duty payable under S. 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 S. 3 of the Central Excises and Salt Act, 1944.