1987 (2) TMI 321 - AT - Central Excise

Summary

Issues:
Interpretation of the term "bought leaf factory" under Notification No. 90/70-C.E.
Whether the word "and" in the explanation should be read as "or" to avoid discrimination.
Application of statutory interpretation principles to determine legislative intent.

Detailed Analysis:
The case involved the denial of a duty rate reduction to M/s. Jodhpur Tea & Industries (P) Ltd. under Notification No. 90/70-C.E. The dispute centered on whether they qualified as a "bought leaf factory" as per the notification's definition. The Assistant Collector's order, upheld by the Central Board Excise and Customs, was challenged through a revision petition to the Central Government, which was treated as an appeal before the Appellate Tribunal.

The crux of the matter lay in the interpretation of the term "bought leaf factory," defined as a tea factory purchasing at least two-thirds of its green leaf from external sellers in specific financial years. The lower authorities rejected the claim, emphasizing that the appellants did not meet the criteria in the financial year 1963-64 due to the firm's establishment post that period. The appellant's argument, presented by Shri Dhar, revolved around reading the term "and" in the explanation as "or" to prevent discrimination between factories existing in 1963-64 and those established later.

Shri Dhar cited a Supreme Court case to support his contention that statutory interpretation sometimes requires reading "and" as "or" to align with legislative intent. However, the Tribunal found this argument inapplicable to the present case, where the literal reading of "and" did not lead to an absurd result. The Tribunal clarified that it couldn't assess the notification's validity based on discrimination concerns but focused on whether reading "and" as "or" aligned with legislative intent.

The Tribunal referenced statutory interpretation principles to emphasize that altering conjunctions should only occur if the literal reading produces an absurd outcome. In this case, reading "and" as "or" would create an absurdity by granting benefits without considering subsequent years' compliance. Ultimately, the Tribunal upheld the lower authorities' decisions, dismissing the appeal based on the clear wording of the notification and absence of evidence supporting a broader legislative intent.

In conclusion, the Tribunal's judgment centered on the precise wording of the notification, the absence of evidence indicating a legislative intent to benefit all bought leaf factories, and the application of statutory interpretation principles to maintain coherence in legal provisions.