1994 (4) TMI 74 - SC - Central Excise

Whether the appellant is entitled to the exemption from such portion of excise duty as has been spelt out in Notification No. 108/81-Central Excises, dated 24-4-1981 read with Notification No. 83/84-Central Excises, dated 2-4-1984 and 214/84-Central Excises, dated 9-11-1984? Held that - What had been stated in the notification of 9th November, 1984 cannot relate to the notification of April, 1984. We would add that granting of exemption to the paper board from 2nd April, 1984 does not suffer from any irrationality or discriminatory treatment. So, no case for our interference with the impugned judgment of CEGAT, in exercise of power under Article 136 of the Constitution, has been made out. The appeal is, therefore, dismissed

Summary

Issues:
- Entitlement to exemption from excise duty as per specific notifications.

Analysis:
The judgment revolves around the determination of whether the appellant is entitled to exemption from excise duty as outlined in various notifications related to the paper industry. The notifications aimed to incentivize investment in paper manufacturing by providing excise duty concessions. The appellant's claim for exemption is based on the interpretation of the notifications issued in 1981, 1984, and 1984. The key contention is regarding the commencement date for granting exemptions and the applicability of subsequent notifications to the appellant's case.

The notifications issued by the Central Government in 1981, 1984, and 1984 introduced exemptions for paper and paper board manufacturing industries. The appellant, having started manufacturing paper board in 1979, sought full benefit of the exemptions. However, the dispute arose concerning the interpretation of the last notification issued in November 1984, which altered the provisions related to the commencement of exemptions. The appellant argued that the wording of the November 1984 notification should encompass the earlier notifications to grant them exemption from 1979 onwards.

The Court analyzed the language of the November 1984 notification and rejected the appellant's interpretation. The Court emphasized that the last notification specifically referred to the April 1981 notification and did not extend the exemption period to cover the period from 1979. The Court also addressed the appellant's argument that the April 1984 notification should be considered substantive, giving exemption to paper board, and thus, the November 1984 notification should include it. However, the Court held that such an interpretation would go against the intended policy objectives and would expand the scope of exemption beyond the government's intent.

Furthermore, the Court referred to various legal precedents to support its decision, emphasizing the importance of interpreting exemption notifications strictly and considering the government's policy intentions. The Court highlighted that the differential treatment between paper and paper board manufacturing was rational and not discriminatory, as the notifications aimed to achieve specific objectives based on industry representations.

Ultimately, the Court dismissed the appeal, upholding the decision of the Customs, Excise, and Gold (Control) Appellate Tribunal (CEGAT). The Court found no grounds for interference and ordered each party to bear their own costs, concluding the legal dispute over the entitlement to excise duty exemptions as per the specific notifications.