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TMI Blog2000 (4) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... xempts all excisable goods manufactured in a workshop within a factory and intended for use in the said factory or in any other factory of the same manufacturer, for repairs or maintenance of machinery installed therein, from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) : Provided that where such use is in a factory of a manufacturer, different from his factory where the goods have been manufactured, the exemption contained in this notification shall be allowable subject to the observance of the procedure set out in Chapter X of the Central Excise Rules, 1944." 2It is clear from the notification that the. exemption is in respect of goods manufactured "in a workshop within a factory" and intended for use in the said factory or in any other factory of the same manufacturer for repairs or maintenance of machinery installed therein. Brief facts in the case of the appellants may be stated in order to appreciate whether the appellants meet these requirements. 2.1Appellant, M/s. The Tata Iron Steel Company Limited (TISCO) in Appeal No. E/2968/88-B is a registered company with its headquarters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured are intended for use in the said factory or in any other factory of the same manufacturer for repairs or maintenance of machinery installed therein. Therefore, such of the production in the factory as is intended for maintenance/repair remains exempt and the remaining production in the factory only is subject to duty. It has also been submitted that the proviso to the notification removes any doubt about the eligibility of the goods as it mentions that "where such use is in a factory of a manufacturer, different from his factory where the goods have been manufactured, the exemption is subject to the observance of Chapter X procedure". It was emphasised during hearing by the learned counsel representing TISCO that it is significant that the proviso refers to "where such use is in a factory ………..different from his factory where the goods have been manufactured". The learned counsel submits that the word used in the proviso is not where such use is in a factory different from the workshop where the goods have been manufactured. He submitted that if the intention was to limit the exemption to manufacture in a 'workshop', the proviso would not have used the word 'factory. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he words 'within a factory would appear to be of no significance and is only a surplusage. 3.2The learned CDR submitted that there is a. clearly understood distinction between 'factory and 'workshop' and the Revenue was, therefore, right in holding that manufacture in the factory cannot be equated with manufacture "in a workshop within a factory. He submitted that the appellants were using goods manufactured in one factory for repair of goods in another factory and granting exemption to such goods would be going well beyond the scope of the exemption notification. The exemption is in respect of all goods manufactured in a workshop. Therefore, the goods eligible for exemption are the separate production of workshop and not the commercial produce of the factory. Assorted goods come to be produced in non-commercial quantities in workshops for use in the repair and maintenance of machinery installed in the factory. The Notification No. 281/86 exempts such goods and not the goods mass/commercially produced in the factory. According to him, there is no ambiguity regarding the scope of the notification. He also submitted that even if the wording of the notification is amenable to interp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to the settled point of interpretation of law that the wordings of law should not be interpreted in a manner which would make certain express provisions redundant or superfluous. The Collector has held that the notification cannot be interpreted ignoring the relevance of the expression 'workshop'. The order also observes that it is a known fact that in a number of cases, a manufacturer has a workshop where some items exclusively required for maintenance purposes are produced/manufactured. By virtue of the present notification, the Central Government has exempted from the purview of central excise levy, such items manufactured in a factory but captively used for the purpose of maintenance of machine/machinery. The order also notes that it is not the appellants' case that the type of bearings required by them for repair/maintenance are different from what is sold by them to their customers and that the bearings required for maintenance or repairs are manufactured separately in a workshop for captive consumption. 4.1In the case of ICL Foundries Ltd., the order-in-original denied the benefit of exemption notification because, according to the assessees themselves, they did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the definition of the word 'factory' in Central Excise in Section 2(e) of the Central Excise Act is an extended one, as to cover premises including the precincts thereof. In view of this definition of 'factory' in the Central Excise Act and the dictionary meaning of the word 'workshop', the term 'workshop' used in the notification should be taken as extending to the whole factory and co-terminus with 'factory' itself. Further, the intention of the notification is to grant exemption to goods produced in a factory of a manufacturer provided they are intended for use in maintenance or repair in the factories of the manufacturer. Therefore, the term 'workshop' should be taken as to include the entire factory and if necessary, the words "in a workshop" may be treated as surplusage. As against this contention of the appellants, the Revenue authorities have held that the notification is clear that the exemption is only in respect of production in a workshop within a factory. Therefore, if the production is not carried out separately in a workshop situated within the factory, the exemption would not be available. The Collectors have also held that it is not permissible to treat cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cope of the exemption. This is to almost re-write the notification according to one's own purposes ignoring the intention of the legislature. If the legislature meant to grant exemption on an extended scale so as to include all goods manufactured in a factory provided they are intended for maintenance or repair it would have stated so in plain terms by omitting the words which the appellants now submit to be surplus. This is a course which interpreting authorities should avoid. Further, this is not a case where intention is required to be ascertained through interpretation. Adherence to the ordinary meaning of the words used in Notification No. 281/86 and to the grammatical construction of those words do not lead to any manifest absurdity which would render the notification a futility. The intention is clear from the language of the notification itself. The Notification, as it is worded, grants exemption to a class of goods. That class would be, eligible for the exemption when the notification is construed treating all the words in the notification to be having effect. Thus, the exemption under Notification No. 281/86 is only in respect of goods separately produced in a workshop wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or by necessary implication therefrom, the matter is different but that is not the case here. In this connection we may refer to the observations of Lord Watson in Salomon v. Salomon and Co., 1897 AC 22 at p. 38 : "Intention of the legislature is a common but very slippery phrase, which, popularly understood may signify anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication". " The relevant extract from the judgment in Coromandal Fertilisers Ltd. v. Union of India and Three Others reported in 1979 (4) E.L.T. (J 501) is also reproduced below :- "Taxing Statute - Interpretation : The rules and notifications issued under Taxing Statutes are to be understood strictly and with the aid of the language employed therein. There is no scope for any element of intention while interpreting taxing statutory provisions and notifications." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd. reported in 1988 (38) E.L.T. 741 (S.C.) that "While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoided." The Court further emphasised that "The choice between a strict and liberal construction arises only in case of doubt with regard to the intention of the Legislature manifest on the statutory language. Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute. If the words are plain and clear and directly convey the meaning, there is no need for any interpretation." The learned CDR has urged a strict interpretation of the exemption in favour of the Revenue based on the observations of the Supreme Court in the case of Novopan India Ltd. (supra). In that judgment, the Supreme Court had taken note of its earlier decisions in Hansraj Gordhandas v. H.H. Dave, Wood Papers Ltd. and Mangalore Chemicals Fertilisers Ltd. and confirmed that exemption being in the nature of exception is to be construed strictl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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