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TMI Blog1982 (8) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolidate and amend the law relating to central duties of excise on goods manufactured or produced in certain parts of India and to salt. Section 2(f) defines manufacture and includes any process incidental or ancillary to the completion of a manufactured product. Section 3 is the charging section reading as follows :- "3. Duties specified in the First Schedule to be levied. - (1) There shall be levied and coJlected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India, as, and at the rates, set forth in the First Schedule. (1A) The provisions of sub-section (1) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, Government as they apply in respect of goods which are not produced or manufactured by Government. (2) The Central Government may, by notification in the Official Gazette, fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the First Schedule a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 123/74-C.E., dated August 1, 1974. 5. In the speech of the Finance Minister made on February 28, 1978 it was expressed that in view of the paramount need for mobilising resources for development without creating fresh distortions in the tax structure, the Finance Minister proposed to levy a special duty at the rate of 1/20th of the basic excise duties presently collected on each item in the central excise tariff. In doing so, the Finance Minister proposed to exempt coal, electricity and goods which were assessed under Item 68 of the tariff. According to the Finance Minister, that measure would result in an additional revenue of Rs. 214 crores on indigenous production and a sum of Rs. 15 crores by way of increase in countervailing duties on imports. Clause 37 of the Finance Bill, 1978 levied this special duty of excise and was presented and passed by the Parliament as Finance Act, 1978. Section 37 of the Finance Act, 1978 provides that in case of goods chargeable with duty of excise under the Act, as amended from time to time, read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable, there shall be levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, the learned Counsel for the petitioners is that the notification dated August 1, 1974 which exempts the tyres for motor vehicles falling under sub-item (1) of Item 16 of the First Schedule to the Act from so much of the duty leviable thereon as is in excess of fifty-five per cent ad valorem not only consists of the basic duty of excise leviable under the Act but also the special duty (additional duty/auxiliary duty) of excise which has been levied in respect of the said goods under the Finance Act, 1978. The relief in excise duty under the notifications is intended to cover in its scope both the basic duty of excise and the special duty (auxiliary duty/ additional duty) of excise. The counsel invited our attention to the exemption notifications issued by the Government from time to time and the language employed to effectuate the purpose of exemption. One set of notifications mentions the exemption as from the whole of the duty of excise leviable thereon under a specified sub-item of a particular item of the First Schedule to the Act. The Notification No. 249/67-C.E., dated November 8, 1967 is of that specie, the subject matter of interpretation in C.W.P. 1773/79 which was fran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ications itself and in all these cases no exemption is given or intended to be given in respect of duties of excise which are imposed later than the exemption notifications. Section 37(4) of the Finance Act, 1978 makes the provision of the Act and the Rules made thereunder, including those relating to refunds and exemptions, applicable to the special duties, but, says the counsel, there is no exemption notification issued under the Finance Act to extend the exemption to special duty of excise which is in addition to the excise duty payable under Section 3 of the Act. Reference is invited to the exemption notifications which have been issued from time to time under the special enactments or under the Finance Act when the legislature or the Government intended to give the concessions. Reliance is placed on the speech of the Minister of Finance wherein he expressed the paramount need for mobilising the resources and to the proposed levy of a special duty and the resultant additional revenue. It was urged that the object would be frustrated if the exemption is extended beyond what was contemplated in the Finance Act, 1978. Relying upon the law laid down by the Supreme Court in "K.P. Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate postulated by that section and Section 280ZD of the Income-Tax Act, 1961 meant excise duty actually paid or excise duty leviable under the Act. We may express here that these cases do not advance the case of the respondents before us. Section 280ZD(6)(b) of the Income-Tax Act, 1961 had specifically stated that in that section "duty of excise means the duty leviable under the Central Excises and Salt Act, 1944''. In view of the meaning assigned to the expression "duty of excise" by clause (b) of sub-section (6) of Section 280ZD, it was held in those cases that it is not permissible to include the special duty levied by Section 80 of the Finance Act, 1965 within the expression duty of excise for the purpose of the grant of tax credit certificate. 12. We may first clear the ground of some cobwebs. The duty of excise is a tax upon goods primarily levied upon a manufacturer or producer in respect of the commodity manufactured or produced. Entry 84 of List I of the VIIth Schedule to the Constitution of India empowers the Parliament to levy the duty of excise on tobacco and other goods manufactured or produced in India (except those specified therein). Section 3 of the Act is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition to that leviable under the Act and would be a tax on goods manufactured or produced relatable to Entry 84 of List I of VIIth Schedule. Various statutory forms have been brought to our notice. Rule 54 provides the submission of a monthly return in the proper form showing the quantity of excisable goods manufactured during the month etc., and such other particulars as may be specified. The form is "Form R.T. 3" which has to contain, inter alia, the information of payment of duty of excise under different heads, such as, 'basic', "additional', `auxiliary' and 'cess'. Rule 56A provides for special procedure for movement of duty paid materials or component parts for use in the manufacture of finished excisable goods. 'Form R.G. 23 Part II" of the entry book of proforma credit contains the column for giving information as to the 'basic central excise duty', 'special excise duty' and 'additional excise duty'. Rule 173G prescribes the procedure to be followed by the assessee in the removal of excisable goods on determination of duty by producers, manufacturers or private warehouse licensees. "Form R.T. 12" again calls for information as to duty paid, and the information has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1978 by calling it a special duty of excise. Nevertheless, it is a specie of the excise duty leviable under a Finance Act. A charge may be increased by amending the Act or by introducing it in the Finance Act. The additional surcharge leviable under Clause (c) of paragraph A of Part I of the First Schedule to the Finance Act, 1963 read with Section 2(1)(a)(ii) of that Act was held by the Supreme Court in Madurai District Central Cooperative Bank Ltd. v. I.T.O.", 101 I.T.R. 24 as relatable to Article 271 of the Constitution of India by which the Parliament could increase any of the duties or taxes referred to in Articles 269 and 270 by a surcharge for the purpose of the Union, and could be levied by the Parliament through the medium of a Finance Act. Additional tax revenue could be collected either by enhancing the rate or by levy of a fresh charge by the Parliament, through the medium of a Finance Act. If Parliament has the legislative competence to introduce a new charge or tax, it may exercise that power either by incorporating that charge in the Income-tax Act or by introducing it in the Finance Act or for that matter by enacting any other statute. The excise duty may thus b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with which Indian Aluminium Co. was concerned. On an interpretation of the exemption notification and the inbuilt guidance available in that notification it was held that exemption under the notification covered the auxiliary duty of excise leviable under Section 36 of the Finance Act, 1976. In "Government of India v. Madras Aluminium Co. Ltd., Coimbatore", 1981 (8) E.L.T. 892 decided by a Division Bench of the Madras High Court on April 30, 1981 it was held that the regular duty which is in the form of surcharge on excise duty should be treated as part of the excise duty and, therefore, the duty leviable thereon referred to in the notification dated May 24, 1971 in that case took with it the regulatory duty and the additional regulatory duty leviable in respect of aluminium products manufactured. In that case on December 13, 1971, the Government of India imposed a regulatory duty at the rate of 25% B.E.D. on aluminium, and this was subsequent to the exemption notification which was issued in exercise of the powers conferred under Rule 8(1). The contention of the Government that the exemption notification would apply only to the basic duty payable by the manufacturers and not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r nothing to qualify the language of a statute, the words and sentences have to be construed in their ordinary and natural meaning [vide 36 Hals (3rd Edn.) s, 585]. What we are now concerned with is a fiscal provision and it has often been said that there is no equity in a taxing statute and either the subject is within it or not, on the words of the enactment or the rules validly made thereunder. In a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the words of the provision. If the tax payer is within the plain terms of the exemption he cannot be denied its benefit by calling in aid any supposed intention of the exempting authority". 17. In Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise and Customs, Surat and Others, A.l.R. 1970 S.C. 755 = 1978 (2) E.L.T. (J 350) wherein it was held :- ".......It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the exemption notification can be levied. The petitioners are within the plain terms of the exemption and they cannot be denied its benefit by calling in aid the advancement of the object and purpose of the Finance Act, 1978 in imposing the additional levy or the special duty of excise. The Courts cannot balance the policy of the relief in excise duty by grant of exemption against the additional levy of the excise duty, except from the language of the two provisions. The legislative intent can only be ascertained from either the express words employed or by reasonable and necessary implication. The express words clearly support the operation of the exemption in respect of duty of excise and that means all duties of excise leviable. By necessary implication, the exemption is to the duty of excise leviable which would include the levy under the Act as well as the Finance Act. The duty of excise leviable cannot be limited by the language of the notification to the basic duty of excise leviable only under the Act, for that would be adding words to the exemption notification which is not permissible in construction of a fiscal notification. As noticed by Lord Watson (supra) the intent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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