M/S. I.T.C. LTD. versus COMMISSIONER OF CENTRAL EXCISE, NEW DELHI AND ANR.

Citation: [2004] SUPP. 4 S.C.R. 293 · Decided: 10-09-2004 · Supreme Court of India · Bench: RUMA PAL

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Judgment (excerpt)

M/S. I.T.C. LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE, NEW DELHI AND ANR. 
SEPTEMBER I 0, 2004 
[RUMA PAL AND P. VENKATARAMA REDDI, JJ.] 
Central Excise Act, 1944-Section 4, Notification No. 36183 dated 
01.03.1983 and Notification No. 201185 dated 02.09.1985 issued under 
Central Excise Rules, 1944-Rule 8 (1), Additional Duties of Excise (Goods 
of Special Importance) Act, 1957-Section 3(3)-Maximum retail price 
means maximum price de/cared on package under Standards of Weight and 
Measure Act, I 976 and Standard Weight and Measures (Packaged Commodity) 
Rules, 1977-Held,-Notification does not envisage an enquiry into the 
correctness of the MRP printed on the package, by the Excise Office-Thus, 
Excise Authority to act on the basis of printed MRP. 
Standards of Weight and Measurers Act, 1976-Sections 3, 39, 67 and 
BJ-Provisions discussed-Standard Weight and Measures (Packaged 
Commodity) Rules, 1977-Rules 2(r), 23(2), 23(6). 
Res judicata-Plea of-Cannot be allowed to be taken for the first time 
at the appellate stage. 
Interpretation of Statutes-Unambiguous words to be construed strictly 
according to their ordinary and natural meaning-Legislative intent can be 
looked into only if there is ambiguity in the statutory language-Rules of 
interpretation discussed. 
Respondent-Revenue charged the appellant-assessee with offence 
of under pricing with intention of evading payment of appropriate duty, 
and imposed penalties. Appellant filed appeals before CEGAT anti it set 
aside quantification of duty demand raised on appellant and remanded 
the matter for fresh determination of duty demand. Hence the appeal. 
Allowing the appeal and dismissing the corrected appeal, the Court 
A 
B 
c 
D 
E 
F 
G 
HELD : 1. If plea of res judicata was not raised in pleadings, no 
party would be permitted to raise it for the first time in appeal. The only 
H 
293 
294 
SUPREME COURT REPORTS [2004] SUPP. 4 S.CR. 
A 
exception is when plea of res judicata is in fact argued before the lower 
Court. In the present case the plea had not been taken by the respondent 
at any stage before any of the authorities, but arguments exactly to the 
contrary had been put forward by the respondent. Hence, plea of res 
judicata not allowed to be raised. [309-A, BJ 
B 
c 
.· D 
E 
F 
G 
Daryao v. The State of UP., [1962) 1 SCR 574; Medapati Suraya v. 
Tondapu Bala Gangadhara Ramakrishna Reddi, AIR 35 (1948) PC 3, 7 
and V. Rajeshwari v. T.C. Sarav1 .. mabava, (2003) 10 Scale 768, referred to. 
2. The general rule of statutory construction is that words have to 
be construed strictly according to their ordinary and natural meaning, 
particularly when the statute is a fiscal one irrespective of the object 
with which the provision was introduced._ Of course if there is ambiguity 
in the statutory language, reference may be made to the legislative intent 
to resolve the ambiguity. But if the statutory language is unambiguous 
then that must be given effect to. The legislature is deemed to intend 
and mean what it says. The need for interpretation arises only when the 
words used in the statU:te are, on their own term ambivalent and do not '~ 
manifest the intention of the legislature. But there are exceptions to this 
rule. Firstly, rule of strict construction does not apply to a provision 
which merely lays down. the machinery for the calculation or procedure 
for the collection of tax: Secondly, if two constructions are possible and 
a strict construction would lead to an absurd result then the construction 
which is in keeping with the object of the statutory provision or in 
keeping with equity could be accepted. [308-H; 309-A, B, E; 310-B, CJ 
Keshavji Ravji and Co. and Ors. v. Commissioner of Income Tax, 
[1990) 2 sec 231, relied on. 
Innamuri Gopalan v. State of Andhra Pradesh, [1963) 2 SCR 898; 
Hansraj Gordhandas v. HH Dave and Ors., [1969) 2 SCR 260; J.K Steel 
Limited v. Union of India, [1969] 2 SCR 481; Oxford University Press v. 
CIT, (2001) 3 SCC 359; Gursahai Saigal v. Commissioner of Income Tax, 
Punjab, (1963) 3 SCR 893 and Commissioner of Income Tax v. J.H Got/a, 
Yadagiri, [ 1985] SCC 343, referred to. 
3.1. Dispute in substance relates to interpretation of phrase "may be 
H 
sold" used in Notification. While word "may" can indicate "possibility" 
I.T.C. LTD. v. C.C.E. 
295 
or "capability", it is also used as denoting "permission". It is in the third ·A 
sense that the word 'may' has been used because it has been qualified by 
the phrase 

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