ROHIT PULP AND PAPER MILLS LTD. versus COLLECTOR OF CENTRAL EXCISE, BARODA

Citation: [1990] 2 S.C.R. 797 · Decided: 26-04-1990 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

ROHIT PULP AND PAPER MILLS LTD. 
A 
r'. -
v. 
COLLECTOR OF CENTRAL EXCISE, BARODA 
APRIL 26, 1990 
[S. RANGANATHAN AND A.M. AHMADI, JJ.] 
B 
Central Excises And Salt Act, 1944/Central Excise Rules, 
''1" 
1944: Sections 4, 35C/First Schedule, Item 17, Rule 8( 1), and Notifica-
lion Nos. 24 of 1984. 25 of 1984 and Provisoes and 45 of 1985-Excise 
Duty-Concessional rates on paper and paper board-Exception 
clause-Interpretation of-Art paper, and chromo paper-Whether c 
entitled to exemption-Principle of noscitur a sociis-Applicability of. 
Notifications No. 24 and 25 of 1984 under rule (1) of the Central 
·~ Excise Rules, were issued on 1.3.1984 in respect of paper and paper 
board falling_under item 17(1) of the first schedule to the Central Excises 
and Salt Act, 1944. While notification No. 24 of 1984 restricted the 
D 
excise duty on certain items, notification No. 25 of 1984 provided for a 
concession in respect of paper and paper boards manufactured out of 
pulp containing not less than 50 per cent by weight of pulp made from 
materials (other than bamboo, hardwoods, softwoods, neds or rags) 
and cleared on or after the 1st day of April in any financial year, subject 
:/ 
to certain important conditions set out in the provisoes to the notifies-
E 
tion. Under the provisoes, the concessional rates were applicable only if 
the factory did not have plant attached to it for making bamboo, wood 
pulp and the exemption would not apply to cigarette tissue, glassine 
paper, grease proof paper, coated paper (including waxed paper) and 
paper of a substance not exceeding 25 grammes per square metre. 
).._ 
Another notification No. 45 of 1985 dated 17.3.1985 was also issued 
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prescribing rates on paper and paper board falling under the aforesaid 
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item including coated paper. 
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The appellant-assessee had a factory in which different varieties 
of paper and paper board were being manufactured, using waste paper 
and cereal straw containing more than 50 per cent by weight of pulp 
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made from the unconventional raw materials. The factory did not have 
a bamboo pulp plant . 
. A.... 
The assessee was manufacturing art paper and chromo paper. 
These two types of paper generally fell under category of printing and 
writing paper. These two articles also fell under the description coated 
H 
797 
A 
798 
SUPREME COVRT REPORTS 
[1990] 2 S.C.R. 
paper used in the second proviso to the notification No. 25 of 1984. The 
appellant initially paid excise duty on the goods manufactured by it in 
terms of notification No. 24 of 1984, but later claimed concessional rates 
prescribed by notification No. 25 of 1984. Since coated paper was taken 
out of the purview of notification No. 25 of 1984, by the proviso, the 
Excise Department refused to permit the assessee to avail of this conces-
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sion in respect of its manufactured goods. This was confirmed by the 
Central Excise and Gold Control Appellate Tribunal. 
c 
D 
E 
F 
In the appeal before this Court, on behalf of the appellant-
assessee it was contended that though the expression 'coated paper' had 
generally a wide connotation and included coated papers of all varieties, 
it should be given a restricted meaning in the context in which it 
appeared in the proviso, that in the paper business, paper was broadly 
two varieties, "industrial paper" and "cultural paper", that wl!lle 
paper used for printing or writing was treated as cultural paper 
that used for various purposes, broadly described as industrial pur-
poses, such as wrapping, packing, sanitary use and the like_, was indust-
rial paper, that since a common strain ran through all the five 
categories mentioned in the proviso, inasmuch the fu-st three varieties, 
admittedly fell under the category of industrial paper and the last one 
was invariably used for industrial purposes, and so found by the Tri-
bunal, the word 'coated paper', must be read in that context, and 
should be interpreted by applying the principle of "Noscitur A Sociis" 
or on the analogy of the "Ejusdem generis" principle and that even if 
the words of the proviso were capable of being construed in a wider 
manner so as to deny exemption to all kinds of coated paper, the Court 
should apply the well-established principle of construction of taxing 
statutes that an ambiguous provision should be interpreted in favour of 
the subject. 
On behalf of the respondent it was contended that there was no 
1 
principle of interpretation by which the plain and natu

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