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TMI Blog1997 (9) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... period and quantum specified in the relevant notifications. 4.. Both the Incentive Schemes and the Deferment Schemes are applicable in terms of clause 3 in each Scheme to, inter alia, industrial units undertaking expansion. 5.. The term "expansion" is defined in identical terms by sub-clause (f) of clause 2 of all these Schemes as: "2. Definitions.-(a).......................... (f) 'Expansion' means increase in the value of fixed capital investment by not less than 25 per cent of the net fixed assets of the existing project, and accompanied by an increase in the production to the extent of at least 25 per cent of the original licensed/registered capacity: Provided that 'sick unit' as defined in clause 2(c) shall be eligible to claim incentives under this scheme. Explanation.-The benefits........for expansion projects will be admissible to the eligible units only after they have achieved at least 85 per cent of their licensed/registered capacity." [Proviso deleted in Incentive Schemes, 1989] 6.. The system of compulsory industrial licensing has been dismantled practically entirely with the announcement in July, 1991 of the new industrial policy of the Government of India. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the RST and CST Acts. The unit had purchased assets of M/s. Siddha Syntex Ltd. (a closed sick unit) in auction conducted by the High Court, Delhi in 1989. M/s. Siddha Syntex Ltd. had a licence for 24,400 spindles but had actually installed 14,300 spindles. The unit's (M/s. HEG Ltd.) plea was that since it had purchased the assets of closed sick unit in auction, in their case, the capacity actually installed by the original promoter should be taken as the basis for determination of expansion, as a special consideration. The case of the unit was earlier considered in SLSC meetings held on February 20, 1995 and June 29, 1995. While it was felt that the unit could be considered eligible on the basis argued by it (the unit), SLSC decided to refer the case to Government for approval. The State Government's decision now being known that the existing definition of 'expansion' could not be changed for the present, SLSC discussed the case of the unit afresh. It was felt that the unit did not satisfy the definition of 'expansion' given under sub-clause (f) of clause 2 of the Scheme. The change of promoter did not alter the situation since the expansion under the existing provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter. (iv) Reference was had to the Board's decision in the Shree Cement's case; application for revision against which was rejected by this Tribunal and the SLP against it rejected by the Supreme Court." 11.. Application No. 17 of 1997 related to the case of M/s. Super Syncotex Ltd., and is directed against a judgment also dated February 28, 1997 of the Board allowing Appeal No. 1103/96/Bhilwara, against order dated June 22, 1996 of the SLSC rejecting the unit's application for the grant of EC for benefits under the Incentive Schemes as an expanded unit. The unit's licence was for 25,000 spindles. 12.. The relevant minutes of the meeting of June 22, 1996 of the SLSC read as under: "(v) M/s. Super Syncotex (India) Ltd.: The unit engaged in manufacture of synthetic blended yarn and cotton yarn in joint sector with RIICO, had set up in 1983 a spinning unit having capacity of 16,184 spindles. The company later increased its installed capacity by addition of 11,880 spindles in two phases and applied for the benefit of Sales Tax Incentive Scheme, 1989 on the basis of expansion. The case of the unit was earlier considered in the SLSC meeting held on January 29, 1996. SLSC f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, has at all any jurisdiction to read down the provisions or legislate by substituting the words and expressions incorporated in the Schemes, by words and expression of its own? (iii) Whether on account of delicensing of the textile industry by the Government of India, the provisions of clause 2(f) of the Schemes with regard to the licensed capacity/registered capacity have become redundant, irrespective of the fact whether the industry was established prior to the delicensing policy or thereafter? (iv) Whether the expression "licensed capacity/registered capacity" used in clause 2(f) of the Schemes has become obsolete as laid down by the Board? (v) Whether, in the facts and circumstances of the case, the industrial units in question fulfil the conditions incorporated in clause 2(f) of the Schemes so as to enable it to claim the benefits of the Schemes? 16.. The learned counsel for the petitioners contended that admittedly the industrial units in question were not eligible for benefits under the Incentive/ Deferment Schemes for expansion with reference to the original licensed capacity. It was contended that in these circumstances the Board could not have taken original lice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e licensing system in July, 1991 Shree Cement Ltd. were free to establish the production facility for the remaining 6 lakh tonnes per annum anywhere in the country. It however opted to establish this unit too in Rajasthan and for the second phase applied under the Incentive Schemes for the grant of an EC. It was contended before the SLSC that the second phase of the unit may either be regarded a new industrial unit eligible for benefits under the Incentive Schemes or in the alternative as a case of expansion. The SLSC rejected the application holding that no case for a new industrial unit or for expansion had been made out. An appeal was filed against this order of the SLSC before the Board which came to be disposed of by the judgment dated March 15, 1995. The Board held that the original licensed/registered capacity of the industrial unit was only 6 lakh tonnes, particularly in view of the stipulation that the licence would be implemented in two phases and on this basis held that the unit in question, i.e., Shree Cement Ltd., fulfilled the requirement of the definition of "expansion" contained in the Incentive Schemes and was therefore entitled to avail of the benefits under the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The application for revision is summarily dismissed." 20.. Against this the department filed a petition for special leave to appeal [(Civil) No. 16950 of 1996] before the Supreme Court of India, which came to be dismissed on September 8, 1996. In that case too the question of interpretation of the expression original licensed/registered capacity had arisen and the Board had held that the original licensed/registered capacity should be taken to mean original installed capacity. The only difference between the application for revision in that case and the instant applications for revision is that in that case a specific question regarding the power of the Board to read into the provisions of the Incentive/Deferment Schemes in a manner to substitute original installed capacity for original licensed/registered capacity had not been specifically raised. The question however was implicit even in that case and as a consequence the decision of the Board in that case which has been upheld by a decision of this Tribunal which has merged in the order of the Supreme Court of September 8, 1996 is relevant and supports the case of the industrial units in question in the present cases for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d unless it is intended to meet a situation where the court has passed an order purely on a technical ground without going into the merits of the case. There was a separate provision which provided that where a penalty of dismissal, removal or compulsory retirement from service imposed upon a Government servant under suspension is set aside in appeal or on review and the case is remitted for further enquiry or action or with any other directions, the order of suspension shall be deemed to have continued in force on and from the date of the original order imposing any of the aforesaid penalties and shall remain in force until further orders. It was contended before the Supreme Court that this creates an invidious distinction and that a person under suspension at the time when the impugned penalty was imposed being deemed to be under suspension on setting aside of the impugned penalty with the matter being remanded could be understood but not in the case of a person being deemed to have been suspended when he was not suspended in the first instance but when it was decided to further enquire into the allegations in cases where the penalty was not set aside on merits. The Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether in the absence of any specific provisions in FERA or the Customs Act empowering a Magistrate to authorise the detention of an arrestee the Magistrate could authorise such detention either in judicial custody or otherwise? The Supreme Court proceeded to deal with this and other questions keeping in view the cardinal principle of the law that every law is designed to further ends of justice but not to frustrate on the mere technicalities and in the background of the principles of statutory interpretation and of the purpose and the spirit of the concerned Acts as gathered from their intendment to observe as follows: "The concerned relevant provisions of the Acts with which we are concerned, no doubt, pose some difficulty in resolving the question with regard to the jurisdiction of the Magistrate authorising detention and subsequent extension of the same when the provisions of those Acts are narrowly and literally interpreted. Though the function of the courts is only to expound the law and not to legislate, nonetheless the Legislature cannot be asked to sit to resolve the difficulties in the implementation of its intention and the spirit of the law. In such circumstances, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpressed by Judge Frank in Guiseppi v. Walling 144F (2d) 608 pp. 620, 622 (CCA 2d, 1944) which is quoted in 60 Harvard Law Review 370, page 372 reading thus: 'The necessary generality in the wordings of many statutes, and ineptness of drafting in others frequently compels the court, as best as they can, to fill in the gaps, an activity which no matter how one may label it, is in part legislative. Thus the courts in their way, as administrators in their way perform the task of supplementing statutes. In the case of courts, we call it "interpretation" or "filling in the gaps"; in the case of administrators we call it "delegation" or authority to supply the details.' Subba Rao, C.J. speaking for the Bench in Chandra Mohan v. State of Uttar Pradesh [1967] 1 SCR 77; (AIR 1966 SC 1987), has pointed out that the fundamental rule of interpretation is that in construing the provisions of the Constitution or the Act of the Parliament, the court 'will have to find out the express intention from the words of the Constitution or the Act, as the case may be......' and eschew the construction which will lead to absurdity and give rise to practical inconvenience or make the provisions of the exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the learned counsel for the respondentindustrial units, except for the Kulu Valley Transport Co.'s case [1970] 77 ITR 518 (SC), all the other rulings are to the same effect as Deepak Mahajan's case, AIR 1994 SC 1775. In the Kulu Valley Transport Co.'s case [1976] 77 ITR 518 (SC) the rule laid down was that if two views are possible the view which is favourable to the assessee must be accepted while construing the provisions of a taxing statute. 26. On the basis of the authorities cited it can safely be said that the Board did the right thing in substituting "original licensed/registered capacity" with "original installed capacity" while construing the definition of "expansion" given in the Incentive/Deferment Schemes. To take a strict literal meaning of the expression "original licensed/registered capacity" would have led to consequences unintended by the Incentive/Deferment Schemes in that it would have continued to subject some to the rigours of a licensing regime which had itself been overthrown and thereby denying them the benefits under the Incentive/Deferment Schemes. To others who came into existence after delicensing and therefore do not have a licensed capacity to s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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