2002 (9) TMI 108 - SC - Central Excise

Whether the respondent is covered by the proviso inserted in the notification No. 109/1986-C.E., dated 27th February, 1986, as amended by Notification No. 3/1988-C.E., dated 19th January, 1988 ? Held that - Even accepting the Tribunal s finding that the process does not strictly amount to stentering, it cannot be disputed that the process adopted by the respondent is analogous to stentering, as admittedly, the respondent is drying the fabric by passing through the hot air stenter. In this view of the matter, the proviso clearly applies and the respondent, therefore, is not entitled to the benefit of the notification. The order under appeal is set aside.

Summary

Issues:
- Interpretation of Notification No. 109/1986-C.E. and its proviso
- Determination of whether the respondent is entitled to the benefit of the notification

Analysis:

The Supreme Court dealt with an appeal filed by the Collector of Central Excise against an order of the Customs, Excise and Gold (Control) Appellate Tribunal. The main issue was whether the respondent was covered by the proviso inserted in Notification No. 109/1986-C.E., dated 27th February, 1986, as amended by Notification No. 3/1988-C.E., dated 19th January, 1988. The respondent manufactured high fur fabrics and claimed the benefit of the notification, which granted an exemption until the proviso was inserted on 19th January, 1988.

The Court analyzed the language of the notification, which exempted certain fabrics from duty but excluded fabrics subjected to specific processes like bleaching, dyeing, printing, and more. The proviso stated that fabrics subjected to these processes would not be eligible for the exemption. The Court applied the principle of ejusdem generis to interpret the phrase "any other process," concluding that processes akin to tentering/stentering fell within the proviso's scope, thereby disqualifying the respondent from the benefit.

The respondent argued that the process of passing fabric through a hot air stenter did not amount to stentering. However, after inspections and expert opinions, the Tribunal found that no stentering/tentering process was being carried out. The Court acknowledged this finding but noted that the process was analogous to stentering, as the fabric was dried by passing through the hot air stenter. Consequently, the Court held that the respondent was not entitled to the notification's benefit and set aside the order in favor of the Collector of Central Excise.

Ultimately, the civil appeal was allowed, and no costs were awarded in the case. The judgment emphasized the importance of strict adherence to the terms of notifications and the application of legal principles in interpreting statutory provisions to determine eligibility for exemptions under excise laws.