K MOHIDEEN HUSSAIN JAFFER LICENCEE ANDAVAR MATCH WORKS KOVILPATTI TIRUNELVELI DT Vs. ASSISTANT DIRECTOR MATCH DIRECTORATE OF MARKETING MATCH DIVISION KHADI AND VILLAGE INDUSTRIES COMMISSION SATTUR

JUDGEMENT

(1.) IN this batch of cases the petitioners have prayed for the issue of a writ of certiorari to quash the order of the first respondent, viz, Khadi and Village INdustries Commission (hereinafter referred to as the 'Commission') dated 18th December, 1979. The petitioners are manufacturers of safety matches under relevant licences issued under the Central Excises and Salt Act, 1944. By Notification No. 154 of 1975 dated 3rd June, 1975 issued under Rule 8 of the Central Excise Rules, 1944, the Central Government exempted matches in or in relation to the manufacture of which no process is ordinarily carried on with the aid of power and cleared by any manufacturer for home consumption, from so much of the duty of excise leviable thereon as is in excess of Rs. 4.30 per gross boxes of 50 matches each. But there is a proviso to this notification which reads that in the case of matches referred to in category 2 and cleared for home consumption during a financial year by a manufacturer from a factory which is recommended by the Khadi and Village INdustries Commission for exemption under this notification as abona fidecottage unit, or which is a member of a co-operative society, including a marketing or service industrial co-operative society, registered under any law relating to co-operative societies for the time being in force, the amount of exemption shall be increased by 55 paise per gross of boxes of 50 matches each, (a) if the manufacturer makes a declaration under this proviso that the total clearance of matches from such factory during the financial year is not estimated to exceed 75 million matches. There are certain other provisions but it is unnecessary to refer to them for the purpose of this case.

(2.) THE Commission is a Commission established by the Central Government under Section 4 of the Khadi and Village Industries Commission Act, 1956. One of the functions of the Commission is as mentioned in Section 15(1) to plan, organise and implement programmes for the development of Khadi and Village Industries. Cottage match industry is one of those industries which is mentioned in' the Schedule as a Village Industry within the meaning of Section 2(h) thereof.

(3.) AS may be seen from the impugned notice, it is not an evasion of Central Excise duty that seemed to have bothered very much rather than the desire of the Commission to purchase the entirety of the production from the manufacturers. It is true that the Government of India suggested this condition of procuring the entirety of the stock in order to avoid any evasion of Central Excise duty by one family creating a number of units in the same compound but producing it under the same labels and marketing the same. Since the benefit of a concessional rate should really reach abona fidecottage unit, the view of the Central Government that the manufacturer should be required to sell the entire stock may be in public interest and so would avoid evasion of Central Excise duty. However, we are unable to see how the Commission could impose this condition. If any such condition is to be imposed it should be done by the Central Government under the notification issued under Rule 8(1) of the Central Excise Rules when they give concessional rate. In fact, we find that in the subsequent year, by Notification No. 99 of 1980, dated 19th June, 1980, the Central Government provided the following two conditions in order to become eligible for obtaining the concessional rate :" * Provided that the matches are cleared for home consumption by a manufacturer from a factory which is recommended by the Khadi and Village Industries Commission for exemption under this Notification as abona fidecottage unit, or which is a member of a co-operative society (including a marketing or service industrial co-operative society but excluding a co-operative bank) registered under any law relating to cooperative societies for the time being in force and assisting exclusively manufacturers of such matchesProvided further that the matches are sold or marketed through the Khadi and Village Industries Commission or a co-operative society (including a marketing or service industrial co-operative society but excluding a co-operative bank) aforesaid or an agency established by a State Government'. The second proviso brings the need for selling the matches through the Commission or a co-operative society or an agency established by the State Government. Though it is unnecessary for us to consider this proviso in these writ petitions it appears to usprima faciethat even this second proviso cannot be put as a condition for the issue of abona fidecertificate by the Commission because it is unnecessary for a manufacturer to get the concession to sell it to the Commission alone and the concession is available even if the manufacturer sells it to an agency established by a State Government. We believe that the validity of this Notification No. 99 of 1980 is also questioned in some other writ petitions. We are referring to this only as an answer to the claim of the Commission for imposing these conditions.