LexM/S. COASTAL PAPER LTD. versus COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM
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[2015] 8 S.C.R. 486 A M/S. COASTAL PAPER LTD. v. COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM (Civil Appeal No.4908 of2005) B JULY21, 2015 [A.K. SIKRI AND R. F. NARIMAN, JJ.] Central Excise Tariff Act, 1985: Notification No. 22194- C CE dated 01.03.1994 - Entitlement to exemption under- Paper manufactured out of pulp of waste gunny bags/jute waste - Revenue denied exemption on the ground that pulp of waste gunny bags/jute waste is nothing but pulp of rags - . Held: Assessee entitled to exemption under the said 0 Notification - Pulp from the waste of jute bags or gunny bags would not be covered by the term 'rags' appearing in Notification dated 01-03-1994 as it could never be the intention to exclude non-conventional material from the benefit of the said Notification when that was precisely the E purpose for which the said Notification was issued to encourage use of non-conventional materia/forthe purposes of manufacturing paper or paper products. Interpretation of statutes: Purposive interpretation - F Exemption notification - Held: It is necessary to go behind the objective for which Notification itself is issu_ed. Allowing the appeal, the Court HELD: 1. The expression 'rags' appearing in the G Notification has to be construed having regard to the attendant circumstances, the context in which the same is used in the said Notification as well as the purpose for which this term has appeared in the Notification. At H 486 COASTAL PAPER LTD. v. COMMNR. OF CENTRAL 487 EXCISE, VISAKHAPATNAM the same time, it is also neces.sary to go behind the A objective for which Notification itself is issued thereby giving it a purposive interpretation, which has become cardinal rule of interpretation. Right from 1977, the Central Government prescribed concessional rates of excise duty for paper made from non-conventional raw material, B subject to certain conditions. The purpose for issuing such Notifications is cl.ear, nainely, to encourage the manufacturers of the paper and paper products to use non-conventional technology in contrast with the conventional technology of using pulping bamboo or C wheat. The reason is too obvious. Use of bamboo or· wheat for the manufacture of paper and paper products . needs cutting of trees which in turn has the devastating effect of deforestation. It leads to degradation of 0 environment and the adverse impact of deforestation with serious consequences are now well-known. On the other hand with the adoption of non-conventional methods of production by taking pulp from the waste of gunny bags/jute waste, mesta, rice straw, wheat straw, E bagasse etc., not only the said waste is utilised in a useful and constructive manner, it saves the environment as well. Such a benevolent purpose for issuing these Notifications has been emphasized by the Finance Ministers themselves from time to time in the budget F speeches. [paras 12, 13] [500-D-H; 501-A-D] 2. The tenor and language of various Notifications issued in this behalf from time to time also reflect the experience which was gained over a period of time. G Whereas in the beginning, Notification(s) prescribed the 'Positive List' of the materials that had to be used to get the benefit of concessional rate of duty, the thrust underwent a conceptual transformation and changed to the 'Negative List', i.e. mentioning only those materials H 488 SUPREME COURT REPORTS [2015] 8 S.C.R. A use whereof will not entail the benefit, thereby making the benefit available to all other forms of non- conventional materials. This was because of the reason that experience has shown that it was not proper to mention the non-conventional material by putting them B in a st1·aitjacket and to provide that all kinds of non- conventional materials used for the manufacture of paper should qualify for concessional rate excepting only those which need not be given such a benefit. This thrust, therefore, from 'Positive List' to 'Negative List' is C of great significance and has to be kept in mind. The pulp made from jute, jute waste including hessian waste and old gunny bags waste are specifically included in the 'Positive List' contained in Notification dated 17 .09.1990. 0 . Thus, as per the said Notification if the paper is manufactured from the pulp made from the waste of the aforesaid materials, the benefit of concessional rate was admissible. To put-it otherwise, it has always been clearly understoo
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