COMMISSIONER OF CENTRAL EXCISE, SHILLONG versus NORTH-EASTERN TOBACCO CO. LTD.

Citation: [2002] SUPP. 4 S.C.R. 373 · Decided: 28-11-2002 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Dismissed

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Judgment (excerpt)

COMMISSIONER OF CENTRAL EXCISE, SHILLONG 
A 
v. 
NORTH-EASTERN TOBACCO CO. LTD. 
NOVEMBER 28, 2002 
[M.B. SHAH AND D.M. DHARMADH!KAR!, JJ.] 
B 
Central Excises and Salt Act, 1944: 
Exemption Notification dated 08.07.99, clause 3 sub-clause (a)-Claim 
for exemption from payment of duty-Entitlement of-Held: If the industrial C 
unit established answers the description of 'new industrial unit' within the 
meaning of sub-clause 3 of the Exemption Notification, it is entitled to claim 
exemption from payment of duty under the Notification-On facts there is no 
material to establish that unit of company at one place closed was shifted to 
new location and also that the sa1ne machinery, accessories or components D 
used by the company in its unit at one place have been shifted for its unit at 
another place-Thus the unit at that place is a 'new industrial unit' and is 
entitled to exemption under the Notification. 
Interpretation of Statutes: 
Exemption Notification-Construction of-Held: liberal interpretation 
should be imparted to the language as far as possible, provided no violence 
is done to the language employed 
E 
Respondent-company was granted industrial licence for setting up 
cigarette manufacturing unit at place S. However, the unit was set up at F 
place B. This was a joint venture with one Industrial Development 
Corporation and as a result of Disinvestment Agreement the unit was 
closed. Later on an Exemption Notification was issued. Company decided 
to start a new unit at place A for availing exemption from payment of 
duty. It also made an application for grant of a licence requesting that 
the industrial licence, which it possessed, be endorsed for the new location. G 
Tribunal held that respondent-company is entitled to claim exemption 
from payment of duty under the Notification. Hence the present appeals. 
Central Excise Department contended that the industrial unit set up 
by the company at place A cannot claim the status of a 'new industrial H 
373 
374 
SUPREME COURT REPORTS [2002] SUPP. 4 S.C.R. 
A unit' within the meaning and intent of the Exemption Notification; that 
the contents of the application for grant of industrial licence made by the 
company shows that the company sought change of location of its 
industrial unit at place A and, therefore, the unit is not a new unit; and 
that the Exemption Notification does not define the expression 'new 
industrial unit' and, therefore, it has to be understood on the basis of 
B provisions of the industrial law and particularly section 11 of the Industries 
(Development & Regulation) Act. 
Respondent~company contended that there is no material on record 
produced by the Department to show that either the machinery or the 
C work force was shifted from unit at B to the unit at A; that merely because 
a request was made to the concerned authorities that the same industrial 
licence be endorsed for new location, it cannot be contended by the 
D 
Department that the unit was a transferred or shifted unit and not a 'new 
unit'; and that the Exemption Notification does not define new unit and 
it has fo be given a meaning as understood in common industrial parlance. 
Dismissing the appeals, the Court 
HELD: 1.1. In the instant case there was no material before the 
Department that pursuant to the Disinvestment Agreement with IDC, the 
unit of the company at B which was closed in 1994 was shifted to the new 
E location at A. Also there is no material to establish that the same 
machinery, accessories or components used by the company in its unit at 
8 have been shifted for its unit at A. The unit at A has to be considered 
as a 'new unit' for the purposes of the Notification to avail exemption. 
Therefore, there is no ground to interfere with the decision of the Tribunal. 
F 
[378-G, H; 380-F; 381-A, BJ 
1.2. The submission that the words "new industry" in Exemption 
Notification has to be construed in the light of the provisions of Industries 
(Development & Regu~ation) Act and since the company itself asked for 
use of same industrial licence by endorsement for the changed location, 
·a the un~t at A was not a 'new unit' cannot be accepted. Merely because 
the ~~.mpany has made an attempt to continue its industrial activities at 
the new location on the basis of same industrial licence granted for its 
earlier location; it cannot be denied the benefit of Exemption Notification. 
Further the attempt of the company to obtain en.dorsement on the same 
industr

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