UNION OF INDIA & ORS. versus RAMACHANDRA SAMBHAJI KANDEKAR ETC.

Citation: [1981] 1 S.C.R. 513 · Decided: 26-08-1980 · Supreme Court of India · Bench: P.N. BHAGWATI · Disposal: Appeal(s) allowed

Judgment (excerpt)

513 
\UNION OF INDIA & ORS. 
v. 
' 
RAMACHANDRA SAMBHAJI KANDEKAR ETC. 
August 26, 1980 
[P. N. BHAGWATI, A. P. SEN & E. S. VENKATARAMIAH, JJ.] 
Central Excise Rules 1944-Rule 8(1) Item 7-provisos-Scope' of-
Exercising the power of exemption conferred under rule 8(1) of the Central 
~Excise Rules, 1944, the Central Government by a notification dated January 5, 
1957 exempted certain varieties of cotton fabrics from the whole of the excise 
·duty leviable thereon. Item 7 set out one of such varieties as under: "Cotton 
·fabrics produced ............... powerlooms ............ provided that the number of 
:power!ooms producing cotton fabrics in such factories does not exceed four." 
By a notification dated November 26, 1960 a proviso was added to this 
item stating that "this exemption shall not be applicable to a manufacturer who 
·Commences production for the first time on or after the December 1, 1960 by 
acquiring powerlooms from any other person who is or has been a licensee 
of a powerloom factory.". From March 1, 1961 item 7 was substituted and 
·from April 1, 1961 a proviso was added. to item 7, the effect of both, of which. 
·was that while from 'March 1, 1961 the benefit of exemption from excise duty 
was available only to those manufacturers who had not more th~n two power· 
.looms in their factories, from and after. Aprit' 1, 1961 even this limited exemp· 
tion was withdrawn from manufacturers who ·commenced production for the 
•first time on or after April 1, 1961 by acquiring powerlooms from any person 
who was or had been a. licensee of powerloom factory. 
From March 18, 1961 a second proviso to item 7 was added which provides 
·"where a person employs not more than four powerlooms and the said pm,er· 
'looms are worked in not more than one shift no duty shall be payable in 
·respect thereof". 
A 
B 
c 
D 
E 
F 
From April 1, 1961 a third proviso was added stating "where a person 
·Commences manufacture of the said fabrics for the first time on· or after April 1, 
1961 by acquiring powerlooms from any other person who is or has been 
a licensee of powerloom factory the rate per shift per month per powerloom 
·shall be the next 'higher rate if any". 
G 
The respondents had acquired powerlooms after April 1, 1961 from persons 
who were or had been licensees and ·were manufacturing cotton fabrics on 
those powerlooms prior to April I, 1961. 
They claimed that since each of 
·them had not more than four powerlooms. which worked in not more than 
one shift he was exempt from payment of excise duty by virtue of the second 
-proviso to item 7. 
The Superintendent df Central .Excise on the other hand contended that 
·the third proviso carved out an exception from the second proviso and since 
H 
'·· 
L 
B 
c 
D 
E 
F 
G 
H 
 
,, 
514 
SUPREME COURT REPORTS 
ll98ll 1 S.C.R:-
each of the respondents commenced manufacture of cotton fabrics for the 
first time after Apl'.il I, 1961 he was not exempt from· payment of excise duty 
but was liable to pay duty at the next higher rate· provided in the amended 
notification of March 18, 1961. 
Appeals of the respondents having been rejected by the Assistant Collector 
and the Collector they filed writs in the High Court challenging the levy of 
excise duty. 
Their writ 'petitions were allowed by the High Court. 
Allowing the appeals 
HELD : (!) It is a well settled rule of. interpretation applicable alike to· 
the rule making authority as to the legislature that where there are two expres-
sions which could have been used to convey a certain· intention, but one of 
these expressions conveys that intention less clearly than the. other, it is proper 
to conclude that if the draftman used that one of the· two expressions which· 
would convey the intention less clearly, he does not intend to convey that 
intention at all. [523 A] 
It is clear on a plain grammatical construction of the proviso under Item T 
of the Notification dated 5th January, 1957 that the prescription of the date 
!st April, 1961 has reference only to commencement of production of the cotton 
fabrics and not to the acquisition of the powerlooms. What is ;required is that 
the production of cotton fabrics must have been commenced by the manufac-
turer for the first tim<: on or after !st April, 1961 and not that the powerloom~ 
also must have been acquired by him on or after that date. 
[520C'D] 
2 (a) Even . though each of the respondents owned not more than four 
powerlooms he would be liable 'to pay excise

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