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TMI Blog2010 (9) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ishra for the respondents. JUDGMENT : (Per V.C.Daga, J.) In the present petition, filed under Article 226 of the Constitution of India, the petitioners have challenged the validity of the order dated 14th December, 1990 (Exh.A) and virus of the second proviso appended to paragraph 4(b) of the Notification No.175/86C. E., which was inserted by amendment Notification No.174/89C. E. dated 1st September 1989, contending that the interpretation sought to be placed thereon by the Revenue renders the notification as unjust, unreasonable, arbitrary, discriminatory and violative of Article 14 of the Constitution of India. Facts in Brief : 2. Facts in brief reveal that the petitioners filed a classification list of their product in 1989 claiming exemption under the Notification No.175/86. The classification list was provisionally approved in the month of November 1989. On 2nd March, 1990 a show cause notice was issued purporting to deny the benefit of Notification No.175/86 as amended by Notification No.174/89 for want of compliance of conditions stipulated in proviso to para-4( b) of the amended notification since it had commenced 3 wp-692.91 production for the first time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not exceeding rupees one and a half crores in the preceding year. (Notification No.175/86C. E. Dated 1.3.1986) In exercise of the powers conferred by subrule (1) of Rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.85/85 - Central Excise, dated 17th March 1985, the Central Government hereby exempts the excisable goods of the description specified in Tariff Act, 1985 (5 of 1986), (hereinafter referred to as the `specified goods'), and cleared for home consumption on or after the 1st day of April in any financial year, by a manufacturer from one or more factories, ..... ..... ..... ..... 3. Nothing contained in this notification shall apply if the aggregate value of clearances of all excisable goods for home consumption, (a) by a manufacturer, from one or more factories, or (b) from any factory, by one or more manufacturers, had exceeded rupees one hundred and fifty lakhs in the preceding financial year. 4. The Exemption contained in this notification shall be applicable only to a factory which is an undertaking registered with the Director of Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Provided that nothing contained in this paragraphs shall be applicable (a) in a case where the value of clearances from a factory during the preceding financial year or the current financial year did not exceed or is not likely to exceed rupees seven and a half lakhs or (b) in a case where manufacturer who is manufacturing specified goods in a factory, other than a factory which is registered under the Industries (Development Regulation) Act, 1951 (65 of 1951) with the Directorate General of Technical Development in the Ministry of Industry, and has been availing of the exemption under this notification during the preceding financial year or the exemption in terms of S.No. 39 of the Table annexed to the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.53/88Central Excises, dated the 1st March, 1988." 7. The aforesaid clause was further amended by another notification bearing No.174/89C. E., dated 1st September, 1989 whereby after the proviso in paragraph4, the following proviso was inserted: " Provided further that nothing contained in clause (b) of the 1st proviso shall apply in a case where a manufacturer who is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ministry of Industry, and has been availing of the exemption under this notification during the preceding financial year or the exemption in terms of S. No. 39 of the Table annexed to the notification of the Government of India in the Ministry of Finance (Dept of Revenue) No. 53/88 Central Excise, dated 1st March 1988." The benefits in the aforesaid notification were not available till 1st March, 1989 to a factory registered with the Directorate General of Technical Development in the Ministry of Industry under the Industries (Development and Regulations) Act, 1951. The clause (b) of para-4 of the subject notification was amended vide Notification No. 174/89 dated 1st September 1989 and the words "or the exemption in terms of S. No. 39 of the Table annexed to the notification of the Government Of India in the Ministry of Finance (Dept of Revenue) No. 53/88 central excise, dated 1st of March 1988" occurring therein were omitted; and following proviso after clause (b) of para-4 was added: "Provided further that nothing contained in clause (b) of the 1st proviso shall apply in a case where a manufacturer who is manufacturing specified goods in a factory and is registered u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on placed by the Excise Authorities on Notification No.175/86 as amended by Notification No.174/89 dated 1 September 1989, namely, that "nothing in paragraph 4 of the notification would apply to unit which is registered under the Industries (Development and Regulations) Act 1951 with the DGTD in the Ministry of Industry provided the unit had been availing of the exemption under Notification No.175/86 during the financial year 1986-87", renders the notification totally ultra vires of Articles 14 and 19(1) (g) of the Constitution of India as it would discriminate between similarly circumstanced units registered with the DGTD that manufacture the same specified goods. One unit would be entitled to the benefit of the notification only because it had availed of the benefit in the year 1986-87 whilst another unit like the petitioners' which came into existence only in June, 1989 would not be entitled to the benefit of the notification No.175/86 since it did not avail benefits of the said notification. In his submission, one cannot expect any unit or factory to avail benefits of any notification muchless Notification No. 175/86 prior to its birth or establishment. 13. Mr.Shroff submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Notification No.175/86CE dated 1 March 1986 were not available to the manufacturers like petitioners right upto 31st August, 1989 for want of registration as SSI units with the Director of Industries or the Development Commissioner in any State since they were registered only under the Industries (Development and Regulation) Act 1951. 18. It was only by virtue of the amendment of 1st September, 1989, the subject Notification No.175/86 became applicable to the manufacturers manufacturing specified goods in the factories even though they were registered under the Industries (Development and Regulations) Act 1951 with the DGTD. In other words, the units, which were registered with DGTD, had no occasion to avail the benefits of Notification No.175/86 prior to 1st September, 1989 i.e. during the financial year 1986-87. On this canvas, the literal meaning sought to be assigned by the Revenue to the amended part of the notification has an effect of producing an unintelligible or absurd result defeating the very purpose of the amendment to the subject notification with effect from 1st September, 1989, whereunder the DGTD registered units were also made eligible to avail of the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper meaning, provide harmonious, just and reasonable interpretation and construe it within the constitutional limits, the principle of reading down the provisions of the Statute needs to be invoked. In All Saints High Court, Hyderabad and others v. Government of Andhra Pradesh and others, 1980 (2) SCC 478 (at page 533), the Apex Court observed as under: "This Court has in several cases adopted the principle of reading down the provisions of the statute. The reading down of a provision of a statute puts into operation the principle that so far as is reasonably possible to do so, the legislation should be construed as being withing its proper...." Keeping the above principle of reading down in mind, the word "and" in the amended proviso if read as "or" then some meaning could be assigned to the notification and it can be saved from the vice of Article 14 of the Constitution of India. Reading the word "and" as "or" does not produce any grammatical distortion rather it will give effect to the clear intention of the Government. On the contrary, reading word "and" as "and" would make no sense and result in an unintelligible and absurd result. 22. It is needless to mention th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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