BRITISH INDIA CORPORATION LTD. versus COLLECTOR OF CENTRAL EXCISE

Citation: [1963] 3 S.C.R. 642 · Decided: 20-08-1962 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

1962 
· A»gud 20. 
' . 
642 
SUPREME COURT REPORTil (1963J 
BRITISH INDIA COhPORATION LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE 
(S. K. DAS, J. L. KAPUR, A. K. SARKAR, 
M. H:rn&YATULLAH and R.&GHUBAR DAY.ll., JJ.) 
E.:cise Duty-Footwear-Levied on factorieB employing fifty 
.\ 
or more workmen and using power exeeding 2 H.P.-If Discrimi-
natory-Central Excises and Salt Act, 1944(1 ~( 1944), Scherlule 
Item No 17 Constitution of Inaia, Ari. 14. 
Under item No.17 of the Schedule to the Central Exeises 
and Salt Act, 1944. excise duty was levied on footwear pro-
duced in any factory employing 50 or more workmen and 
using power exceeding 2 H.P. The petitioner conten.ded that 
the imposition of duty on larger manufacturers only was dis. 
criminatory and there was no reasonable basis for differentiat~ 
ing between manufacturers on the basis of number of workers 
or the employment of power above 2 H.P. and that the im. 
posit.ion of the heavy duty gave rise to a Competition sufficient 
to put the big manufacturers out of business. 
Bela, that item 17 of the Schedule is based upon a 
rt;asonable classification and is validly enac.ted. Manufacturers 
who employed 50 or more workers form a well defined class, 
so aiso manufacturers who use power exceeding 2 H.P. 
In 
imposing the excise duty there is a definite desire to make an 
exemption in favour of the small manufacturer who is unable. 
to pay the duty as easily, if at all, as the big manufacturer. 
Such a classification in the interests of co-operative societies, 
ccttage industries and small manufacturers 
has often t'l be 
made to give 
an impetus to them 
and save them 
from 
annihilation in competition with large industry. 
· 
Orient Weaving Mills (P) Ltrl. v. Union of Iurlia, 
(1962) Supp. 3 S.C.R. 481 referred to. 
ORIGINAL JURISDICTION : 
Petition "No. 94 
of 1955. 
Petition under Art. 32 of the Constitution of 
lnd¥i- for t4e eqforoement of :f'unelamental Rights. 
; 
'· 
3S.C.R: 
SUPREME COURT REPORTS 
643 
Bishan Narain, Rameshwar Nath, 8. N. Andley 
and P. L. Vohra, for the petitioner. 
H. N. Banyal, Additional Solicitor General· of 
·India, N. 8. Bind·ra and P. D. Menon, for 
th!'l 
respondents. 
1962. August 20. 
The Judgment of the Court 
was delivered by 
HrnAYA.TULLAH, J.-This is a petition under Art. 
32 of the Constitution challenging the imposition of 
Excise Duty on the petitioner by virtue of item No. 
l '1 "Footwear" of the First Schedule to the Centr-
al Excises and Sa.It Act, 1944 (l of 1944) with effect 
from February 28, 1954, and the calculation of the 
duty advaloram by including in the price, charges 
for freight, packing and distribution. 
The petitioner, the British India corporation 
Ltd. is a public limited company which was formed 
to take-over other companies and to amalgamate 
them. Among the companies which the petitioner 
took over were Cooper Allan & Company Ltd., and 
the North West Tannery Company Ltd., b1th at 
Kanpur. These two Companies manufature shoes and 
other leather goods and operate as a single unit 
manufacturing the well-known brand of "F L E X'' 
shoes. 
As 
a result of the financial proposals 
of the Central Government 
for the financial 
·year 11:152-55, a bill (No. 9 of 1954) was introduced 
in parliament on February 27,1954. Under cl. 8 of 
the Bill foot-wear were proposed to be taxed at 10% 
adva.loram if produced in any fatory as defined in 
the factories Act, 1948 (63 of 1948). When the 
Finance Act, 1954 (l 7 of 1954) was enacted, the 
Central Excises and Salt Act, 1954, was amended 
by the inclui.ion of item 17 in the Schedule, though 
in a slightly different form. The item as finally 
~Hacte~ ~eaq as follows ;-
1902 
--
Brit i•h. tndia. 
Oorporotioti 1Ltd 
. " .. 
Collector" of Central 
' · ·Excise ·. 
Hidayat~!lalt J. 
1982 
· Bril/ah llldia 
Corpor(Jeion Ltd. 
v. 
Coiled" of Cen11'!1 
ExOIU 
644 
SUPREME COURT REPOH.TS (1963) 
"17. FOOTWEAR, produced in any factory 
in,cluding the precints thereof whereon 
fifty or more workers are working or 
were working on any day of the preceding 
twelve mon£hs, and in any part of which. 
manufacturing process .is being carried on 
with the aid of power or is ordinarily so 
carried on, the total equivalent of such 
power exceeding two horse-power. 
"Footwear" includes all varie-1 Ten per-
ties of footwear, whether known \_ cent 
as boots shoes. sandals, chap- r ''ad 
pals, or by any other name." J valorem" 
Under the 
provisions of the Provisional 
Collection of Taxes Act, 1

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