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TMI Blog1974 (11) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... e common order in all the writ petitioner. 2. The respondent filed the writ petition before the High Court of Madras questioning the validity of clause (b) of notification of the Government of India, Ministry of Finance (No. 205/67-C.E., dated September 4, 1967) on the ground that clause (b) is violative of the fundamental right of the respondent under Article 14. The High Court allowed the petition and this appeal, by special leave, is filed against the order. 3. Section 3 of the Central Excises and Salt Act, 1944 (for short, 'the Act') imposes excise duty on manufacture in respect of items mentioned in Schedule I of the Act. Match boxes are mentioned in Item 38 of the said Schedule and duty is leviable on the manufacture of match box ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantity of matches, if any, cleared in excess up to 100 million matches will be changed at Rs. 4.30 per gross, and, if the clearance exceeds 100 million matches, the entire quantity cleared during the financial year will be charged to duty at Rs.4.30 per gross. This notification, however, enabled the manufacturers with a capacity to produce more than 100 million matches and who were clearing more than 100 million matches during the previous years to avail of the conessional rate of duty at Rs. 3.75 per gross by filing a declaration as visualized in the proviso to the notification by restricting their clearance to 75 million matches. This would have defeated the very purpose of the notification namely, the grant of concessional rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date mentioned in clause (b) of the aforesaid notification and that that was discriminatory. 7. The High Court was of the view that the classification was unreasonabe inasmuch as the fixation of the date for making the declaration, namely, September 4, 1967, as the basis of the classification between those who are entitled to the benefit of the concessional rate of duty an those who are not so entitled, has no nexus with the object of the Act. The High Court said that all manufacturers whose estimated production would not exceed 75 million matches in the financial year 1967-68 would fall under one class and the fact that some among them filed the declaration before September 4, 1967, is not different .... having a nexus with the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for small bona fide units who were in the field when the notification dated September 4, 1967, was issued; the concessional rate was not intended to benefit the large units which had split up into smaller units to earn the concession. The tendency towards fragmentation of the bigger units into smaller ones in order to earn the concessional rate of duty has been noted by the Tariff Commission in its report (see the extract from the report given at p. 500 in M. Match Works v. Assistant Collector, Central Excise, AIR 1974 SC 497. The whole object of the notification dated September 4, 1967, was to prevent further fragmentation of the bigger units into smaller ones in order to get the concessional rate of duty intended for the smaller units an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration before September 4, 1964, that its total clearance for the financial year 1967-68 is not estimated to exceed 75 million matches. In the matter of granting concession are exemption from tax, the Government has a wide latitude of discretion. It need not give exemption or concession to everyone in order that it may grant the same to some. As we said, the object of granting the concessional rate of duty was to protect the smaller units in the industry from the competition by the larger ones and that object would have been frustrated if, by adopting the device of fragmentation the larger units could become the ultimate beneficiaries of the bounty. That a classification can be founded on a particular date and yet be reasonable has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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