JAYPRAKASH MATCH WORKS KOVILPATTI Vs. UNION OF INDIA

JUDGEMENT

(1.) In this batch of writ petitions the validity of Notification No. 137 of 1981, Central Excise, dated 2-7-1981, issued by the Central Government in exercise of their powers under Rule 8(1) of the Central Excise Rules, 1944 giving exemption to a limited extent in respect of excise duty leviable on certain conditions is questioned. In Form the petitioners have prayed for a writ of Mandamus directing the Union of India and the Superintendent of Central Excise to forbear from collecting excise duty on matches in excess of that which is payable under Notification No. 42 of 1981. All these petitioners are manufacturers of matches without the aid of power who may be hereafter designated as non-mechanised sector manufacturers. In order to appreciate the point raised in these writ petitions, it is necessary to set out the Notification which have a relevance to the question. Notification No. 42 of 1981 issued under rule 8 reads as follows :-

(2.) This Notification shall come into force on the 1st day of October, 1981." It may be seen from these notifications that upto 1st July, 1981, the petitioners were liable to pay excise duty at the rate of Rs. 4.50 per gross boxes of 50 matches each and they were getting a further reduction in cases where the matches were packed in boxes in which both the outer slide as well as the inner slide was made of cardboard, in cases where such matches were packed in boxes in which the inner slide alone was made of cardboard. The further concession available under the two provisos in the Notification No. 43 of 1981 which were deleted came in a modified form in Notification No. 137 of 1981. Instead of Rs. 4.50 with a further concession with reference to the use of cardboard either for inner slide or for both the outer slide as well as the inner slide, under Notification No. 137 of 1981, in cases where matches were packed in boxes in which the outer slide alone was made of cardboard, the petitioners were given a concessional levy of Rs. 5.50 and those cases where matches were packed in boxes in which the inner slide alone was made of cardboard, the concessional levy was Rs. 5.26 per gross of boxes of 50 matches each. Similarly, for matches packed in boxes in which the outer slide as well as the inner slide was made of cardboard, a duty of Rs. 4.90 per gross of boxes of 50 matches each, was levied. This was subject to the further condition that the sum total of the value of the capital investment made from time to time on plant and machinery installed in the industrial unit in which the said matches are manufactured was not more than Rs. 20 lakhs.

(3.) There is no dispute that each of these petitioners satisfied the condition relating to the capital investment. The argument of the learned counsel for the petitioners in all these cases is that while granting exemption from the whole or any part of the duty under Rule 8, the Central Government can impose such conditions which are germane or relevant to the particular excisable commodity only and the conditions imposed in notification No. 137 of 1981 are neither germane nor relevant for the purpose of such exemption. The learned counsel also pointed out that under item 38 of First Schedule framed under Section 3 of the Central Excises and Salt Act, 1944, the word 'matches' is also defined. The container of the boxes in which the matches are packed and sold or the material used for making such boxes, have no relevance to the match sticks which are subjected to excise duty and therefore fixing a concessional rate of duty with reference to the use of cardboard either for inner slide or outer slide or both, is beyond the powers of the Central Government under the Act or under Rule 8 of the Rules.