BOMBAY FANCY TEXTILES Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition filed under Article 226 of the Constitution of India raises a short question about the interpretation of the Notification, dated May 14, 1968 issued by the Government of India, in pursuance of Rule 96 of the Central Excise Rules, 1944, whereby the Central Government fixed with effect from March 1, 1968 certain duties for embroidery machines employed for manufacturing embroidery. This Notification runs as under :-

(2.) The petitioners-factory carries on the business of manufacturing quality embroidered fabrics. Embroidery fabrics are excisable goods within the meaning of the Central Excises and Salt Act, 1944. The First Schedule to the said Act specifies the goods as being subject to a duty of excise under the said Act and embroidery fabrics are covered under Item Nos. 19 and 22 of the said Schedule. However, a special procedure has been provided by the provisions of Chapter V, Section F-IX and Rule 96-ZH of the Central Excise Rules, 1944 in the case of embroidery, in the piece, in strips or in motifs. The Manufacturer is entitled to opt for any of the procedures and in this case they opted for any of the procedures and in this case they opted for the procedure laid down in the Chapter V, section F-IX, and Rule 96-ZH of the Central Excise Rules, 1984. Under this rule the Government issued the said impugned Notification fixing the rate of excise duty in respect of embroideries on the basis of metre length of the machine. It is not disputed that in the case of the petitioner factory the first shift from 7.00 a.m. to 3.30 p.m. and the second shift from 3.30 p.m. to 12.00 midnight with half an hour rest, in the duration of each shift. The Central Excuse Department, however, contended that in view of the explanation contained in the said Notification, which defines the word "shift" as a period of eight hours duration irrespective of whether the machine was working for the full period or not, the petitioner-factory must be deemed to have worked in the shifts because the total working hours of the petitioners comes to 17 hours as it exceeds the duration of 16 hours comprising two shifts. In view of this interpretation put upon the explanation three demand notices, dated October 19, 1968, October 24, 1968 to October 25, 1968 were served on the petitioners for the period from March 1, 1968 to October 13, 1968 on the basis that the factory had worked three shifts during this period. The Government issued a fresh Notification, dated December 7, 1968 and amended the previous Notification dated May 14, 1968. By this Notification the explanation contained in the earlier Notification was modified as under :-

(3.) Three demand notices were challenged by the petitioner factory by preferring an appeal and thereafter a revision application to the competent authorities. In the appeal, however, the demands made by the Department were modified to some extent. However, the principle adopted by the Department that the levy of excise duty must be based on the three shifts was upheld by the appellate authorities as well as by the Central Government in revision. The petitioner-factory has, therefore, filed this petition under Article 226 of the Constitution of India challenging the demand notices as well as the decisions rendered by the appellate authorities and the Central Government.