SOUTH EASTERN COALFIELDS LTD. versus COMMISSIONER, CUSTOMS & CENTRAL EXCISE, M.P.

Citation: [2006] SUPP. 4 S.C.R. 200 · Decided: 01-08-2006 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
SOUTH EASTERN COALFIELDS LTD. 
V. 
COMMISSIONER, CUSTOMS & CENTRAL EXCISE, M.P. 
AUGUST I, 2006 
B 
(ASH OK BHAN AND MARKANDEY KA TJU, JJ.] 
Central Excises and Salt Act, 1944: 
s.5A(l)-Notification No. 63195-CE dated 16.3.1995-Exemption from 
C excise duty to 'mines' as defined in s.2lj)(viii) of Mines Act-Workshop 
established within precincts of mine to facilitate repair of all mining machinery 
and equipment used in adjacent coalmines and other collieries-Claim for 
exemption under the Notification---Held, keeping in view the purpose of the 
notification, the word "precincts" used therein has to be given a broader 
D meaning-And thE notification has to be interpreted so as to include within 
the definition of mine a workshop situated in an area or environs thereof-The 
workshop is, therefore, entitled to exemption under the notification-- Mines 
Act, 1952-ss. 20)(viii) and 82-/nterpretation of Statutes-Purposive rule of 
interpretation. 
E 
Words and Phrases: 
"Precincts "-Occurring in Notification No. 63195-CE dated 16.3.1995-
Meaning of 
Appellant-assessee established an electrical and mechanical 
F workshop to facilitate repair of all mining machinery and equipment used 
in the adjacent coal mines and other collieries. Under s.82 of the Mines 
Act, 1952, the Central Government declared this workshop as a mine. 
Under s.2(j)(viii) of the Mines Act, 'mine' would include "all workshops 
situated within the precincts of a mine and under the same management 
and used solely for purposes connected with that mine or a number of 
G mines under the same management." By Notification No. 63/95-CE dated 
163.1995 all goods manufactured in a mine were exempted from duties of 
excise and additional duties of excise. The assessee was issued a show cause 
notice for recovery of central excise duty for alleged contravention of 
Central Excise Rules, 1944 and Notification No. 63/95-CE dated 16.3.1995, 
H 
200 
-
. 
·-
SOUTH EASTERN COALFIELDS LTD. v.COMMR .• CUSTOMS&CENTRAL EXCISE, M.P. 
20 J 
stating that, in respect of the workshop, the assessee was not entitled to A 
exemption provided under the said Notification. For contravention of the 
1944 Rules interest and penalty was also proposed. The Commissioner did 
not accept the plea of the assessee that the workshop was situated within 
the precincts of the mine and, therefore, was entitled to exemption under 
Notification No. 63/95-CE. He ordered payment of the duty along with B 
interest and penalty. The CEGAT dismissed the appeal of the assessee 
holding that since the mine was registered under the Factories Act, 1942, 
it could not have the benefit of the exemption Notification NO. 63/95-CE. 
Aggrieved, the assessee filed the present appeals. 
On the question: whether the workshop in question could be said to C 
be situated within the precincts of the mine, 
Allowing the appeals, the Court 
HELD: I. The word "precincts" does not have a single meaning, 
rather it has several meanings. Where the meaning of a word or expression D 
is not clear, obviously the literal rule of interpretation cannot be applied, 
and hence resort has to be taken to other rules of interpretation. In the 
present case the purposive rule should be applied, and the word 'precincts' 
has to be given the hroader meaning and not the narrower one. Therefore, 
the word 'pre~incts' in the exemption Notification No. 63/95-CE dated 
16.3.1995 has to be interpreted to mean the surrounding region or area; E 
or, the surroundings or environs of a place. This is because the purpose 
of the exemption notification is to grant exemption from excise duty to 
goods produced in a mine so as to encourage the mining industry. A 
workshop which is in an area or in the environs of a mine and js existing 
solely for the purpose connected with the mine and under the same 
management, is obviously, directly serving the mining operations. Hence, 
the notification has to be interpreted so as to include such a workshop 
within the definition of 'mine' for the purpose of grant of exemption, as 
that would encourage the mining industry. The impugned order is, 
therefore, set aside. (205-C; F-H; 206-A-B] 
Collin's English Dictionary; New Shorter Oxford English Dictionary; 
P. Ramanath Aiyar 's Advance Law Lexicon, 3rd Edn.; Black's Law 
Dictionary, 7th Edn. - referred to. 
F 
G 
2. The present case is covered by the Central Excise Act, 1944 and 
registration of a mine under the Factories Act has nothing to do with the H 
202 
SU

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