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Partnership firms seeking exemption from excise duty under Notification No. 44 of 1962 for cotton fabrics. Interpretation of the proviso regarding exemption sharing among multiple processing factories owned by partners in the firms. Analysis: Two partnership firms filed writ petitions seeking a mandamus to direct the Collector of Central Excise to grant them exemption from excise duty for the first 20,000 sq. metres of cotton fabrics cleared in a month, as per Notification No. 44 of 1962. The first firm, M/s. Sivan Printing and Dyeing Factory, Erode, started with four partners in 1956, later continued with three partners. The second firm, M/s. Sivan Mahadevan Printing Mills, Erode, began with seven partners in 1960, increased to eight partners. Both firms obtained processing licenses from the Collector of Central Excise. The Government of India issued a notification in 1962 exempting the first 20,000 sq. metres of cotton fabrics cleared in a month for home consumption from excise duty for processing factories. However, the proviso stated that if a person had proprietary interest in multiple processing factories, the exemption must be shared proportionally among all factories exceeding the 20,000 sq. metres limit. The petitioners argued that since three partners were common between the two firms, the proviso should not apply to them as partners in a partnership were not intended to be covered. The court disagreed, stating that every partner holds proprietary interest in a partnership, and if a partner is involved in multiple firms, the exemption sharing rule applies. The court rejected the contention that the notification only applied when the same individual owned interest in two factories, finding no such limitation in the proviso language. Consequently, the court dismissed both petitions, ruling against the petitioners' contentions.
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