COLLECTOR OF CENTRAL EXCISE, MADRAS versus M/S. ARESON AND COMPANY

Citation: [1997] 3 S.C.R. 111 · Decided: 20-03-1997 · Supreme Court of India · Bench: A.M. AHMADI · Disposal: Appeal(s) allowed

Judgment (excerpt)

I \f 
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•. 
COLLECTOR OF CENTRAL EXCISE, MADRAS 
v. 
MIS. ARESON AND COMPANY 
MARCH 20, 1997 
[AM. AHMADI, 01. AND S.P. KURDUKAR, J.) · 
Ce11tral Excises a11d Salt Act, 1944-S-5-A, Items 34(iii) and 40/Notifica-
tio11 No. 71178-C.E. dt. 1.3.1978 as amended by Notificati01i No. 80/80 C.E. 
A 
B 
dt. 19.6.1980-Clause 2( 1)(ii)--Eligibility for exemption---Assessee claiming 
exemption under para 2(ii) of the Notification as the aggregate value of C 
clearance of both the excisable items did not exceed Rs. 20 lakhs duri11g the 
previous fi11ancial year as set out i11 the said paragraph-field: Both the goods 
bei11g 'specified goods', the assessee's case would be covered by paragraph 
2(i }-Value of one of the items exceeding maximum limit of Rs. 15 lak/is as 
set out i11 para 2( 1 ), the assessee is not entitled for exemption. 
D 
The respondent nsed to manufacture Trailers and Steel Furniture 
liable to payment of excise duty under Tariff item No. 34(iii) and 40 of the 
Central Excises and Salt Act, 1944. He claimed refund of the duty paid 
during the period from April 1, 1980 to September 30, 1980 claiming 
exemption on the basis of paragraph 2(ii) of the Notification dated June E 
19, 1980 on the ground that the aggregate value of clearances of both the 
excisable items did not exceed Rs. 20 lakhs during the previous financial 
year, as set out in the said paragraph. The Assistant Collector rejected the 
claim for refund holding that since the maximum limit of Rs. 15 lakhs set 
out in paragraph 2(i) was crossed in the previous year, there was no 
question of granting refund to the assessee. On appeal, the Appellate F 
Collector reversed the view of the Assistant Collector and held that as the 
aggregate value did not exceed Rs. 20 lakhs, the assessee was entitled to 
the benefit of exemption under the aforemention~d Notification. The 
·Tribunal also affirmed this view. Revenue filed the pn!lient appeal against 
the order of the Tribunal. 
G 
Dismissing the appeal, this Court 
HELD : 1. The respondent is not entitled for the exemption claimed 
under paragraph 2(ii) of the Notification as both the goods are "specified 
goods" and fall within paragraph 2(i). Paragraph 2(i) speaks of aggregate H 
111 
112 
SUPREME COURT REPORTS 
[1997] 3 S.C.R. 
A value of clearances of "each serial number of the specified goods" whereas 
paragraph 2(ii) speaks of "excisable goods" falling under more than one 
item. It is thus that clauses (i) is confined to 'specified goods' whereas 
clause (ii) refers to "excisable goods". All specified goods may be excisable 
too, but if clause (ii) is read as independent of clause (i) it would create 
B an anomalous situation, in that, a manufacturer who is not eligible for 
exemption under clause (i) as the aggregate value exceeds Rs. 15 Iakhs can 
still hop on to clause (ii) and contend that since aggregate value of the 
specified goods which are excisable does not exceed Rs. 20 lakhs, he would 
still.be entitled to exemption. Such an interpretation would render clause 
(i) redundant. As both the goods fall within the expression "specified 
C goods", the case would be covered by clause (i) and not clause (ii). There-
fore the orders of the authorities below holding that the case falls under 
clause (ii) are set aside. [113-F-G; 114-D-F] 
D 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4171 of 
1986. 
From the Judgment and Order dated 8.7.86 of the Customs Excise 
and Gold (Control) Appellate Tribunal, New Delhi in A. No. 
ED/SB(T)/1079/81-BI Order No. 416 of 1986-BI. 
M.S. Usgaonkar, Additional Solicitor General, (Y.P. Mahajan, 
E Hemant Sharma for Ms. Sushma Suri for the Appellant. 
F 
K. Ram Kumar, Ms. Asha Nair, Y.S. Rao and C. Balasubramaniam 
for the Respondent. 
The Judgment of the Court was delivered by 
AHMADI, CJI. This appeal by the Collector Central Excise, Madras, 
is directed against the judgment and order of the Customs, Excise and 
Gold (Control) Appellate Tribunal ('the Tribunal' for short) July 8, 1986, 
whereby it affirmed the order dated August 1, 1981 of the Appellant 
G Collector of Central Excise, Madras granting refund of excise duty to the 
respondent -assessee in reversal of the order passed by the Assistant -Col-
lector of Central Excise, Tirunelveli on February 27, 1981. Briefly stated 
the facts are as under; 
The respondent manufactured Trailers and Steel Furniture liable to 
H payment of excise duty under Tariff Item No. 34(iii) and Tariff Item No. 
,., 
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