HINDUSTAN STEELWORKS CONSTRUCTION LTD. versus LIMESTONE AND DOLOMITE MINES WELFARE AND CESS COMMISSIONER AND ANR.

Citation: [1996] SUPP. 4 S.C.R. 831 · Decided: 21-08-1996 · Supreme Court of India · Bench: M.M. PUNCHHI, SUJATA V. MANOHAR · Disposal: Dismissed
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Judgment (excerpt)

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HINDUSTAN STEELWORKS CONSTRUCTION LTD. 
A 
v. 
LIMESTONE AND DOLOMITE MINES WELFARE AND CESS 
COMMISSIONER AND ANR. 
AUGUST 21, 1996 
[M.M. PUNCHHI AND SUJATA V. MANOHAR, JJ.] 
Limestone and Dolomite Mines Labour Welfare Fu11d Act, 1972 : 
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Sectioll J-Expression ''for any purpose ill co1l11ectioll with manufacture 
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of [roll, Steel''-!nterpretatioll of-Compa11y owning milles-Extractillg lime-
stone alld using it ill the constniction work for expansion of plant engaged in 
production of iroll alld steel-Levy of excise duty imposed ill the nature of a 
cesS-Challenge to levy-Held limestolle used by an owller extracted from his 
mine, for any purpose re/arable to alld in COllllection with the mallufacture of 
commodities, includillg iron and steel, attracts payment of excise duty at the D 
specified rates-Purpose of the Act explained-Held provisiolls of the Act 
should be const1ued widely. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2725 of 
1986. 
From the Judgment and Order dated 27.9.85 of the Madhya Pradesh 
High Court in M.P. No. 71 of 1982. 
Dr. Sankar Ghosh and P.P. Singh, for the Appellant. 
W.A. Qadri for C.V.S. Rao for the Respondents. 
The following Order of the Court was delivered : 
The appellant herein, Hindustan Steelworks Construction Limited, is 
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a company owned by the Government of India. It owns mines from which 
limestone is extracted. It is the case of the appellannhat it is using such G 
limestone in the construction work for expansion of Hindustan Steel Ltd., 
Bhilai Steel Plants, which is engaged in the production of iron and steel. 
Under Section 3 of the Limestone and Dolomite Mines Labour Welfare 
Fund Act, 1972, it is required to pay a duty of excise at such rate not 
exceeding Rs. 1 per metric tonne of limestone extracted and used for the H 
831 
832 
SUPREME COURT REPORTS (1996] SUPP. 4 S.C.R. 
A 
purposes as afore stated. That has been put to challenge. It would therefore 
be essential to reproduce··Section 3 which is as follows : 
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c 
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"3. With effect from su.ch date as the Central Government may, by 
notification in the Official Gazette, appoint, there shall be levied 
and collecte~ as a Cess for the purposes of this Act on so much 
of Limestone and Dolomites produced in any mine. 
(i) As is sold or otherwise disposed of to the occupier of any 
factory; or 
(ii) as is used by the owner of such mine for any purpose in 
connection with the manufacture of cement, iron, steel, ferro-al-
loys, alloy steel chemicals, sugar, paper, fertilizers, refractories Iron 
Ore pelletisation or such other article or goods or class of articles 
or goods, as the Central Government, may, from time to time, 
specify by notification in the official Gazette, a duty of excise, at 
such rate not exceeding one rupee per metric tonne of Limestone 
or Dolomite, as the cess may be, as the Central Government may, 
from time to time, fix by notification in the official Gazette. 
EXPLANATION ; Where the owner of any Limestone or 
Dolomite Mine is also the occupier of any factory, then, for the 
purposes of clause (ii), all Limestone or the Dolomite, as the case 
may be, produced in the mine and not sold or otherwise disposed 
of to the occupier or any other factory shall be deemed unless the 
contrary is proved, to have been used by such owner for any 
purpose in connection with the manufacture of any article or goods 
referred to in or specified under Clause (ii)." 
Attention engaged before the High Court, as also here, is whether 
the above pro,ision be construed narrowly or widely. The High Court has 
taken the view that the expression used therein "for any purpose in con-
G nection with the manufacture of ..... .iron, steel... .. " is of wide amplitude and 
will embrace within its scope such activities as have nexus with its activity 
of manufacture of iron and steel. 
A number of commodities/industries find covered in sub-section (ii) 
of Section 3 and in almost all of them (leaving apart cement and chemicals) 
H the use of limestone per se is not directly towards their manufacture. If it 
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HINDUSTAN S'IEELWORKS CONS. v. LIMESTONE& DOLOMITE MINES WELFARE& CESS COMMR. 833 
is ruled that no limestone is required for the manufacture of iron and steel A 
in the context of sub-section (ii) of Section 3, such narrow reading would 
lead to the provision being rendered otiose. It has to be borne in mind that 
the primary purpose of the Act is to build a Labour Welfare Fund, a 
measure well de
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