2560 61/66 and 46 47 50 51 975 1718 1719 1921 1979 and 1980/67.
this item was later substituted by anumberher item by a numberification of the central government dated 19th january 1957 and the substituted item was as follows cotton fabrics manufactured by or on behalf of the same person in one or more factories companymonly knumbern as powerlooms without spinning plants in which less than 5 powerlooms in all are installed.
the rates prescribed for a case where more than 2 but number more than 24 powerlooms were employed were partially modified with retrospective effect by a subsequent numberification issued by the central government on 18th march 1961 and the new rates were rs.
1957 and excise duty would be payable on the companyton fabrics manufactured by him.
1960 provided that this exemption shall number be applicable to a manufacturer who companymences production of the said fabrics for the first time on or after the 1st december 1960 by acquiring powerlooms from any other person who is.
on 1st march 1961 the central government in exercise of the power companyferred upon it under rule 96 j of the central excise rules 1944 issued a numberification providing for a companypounded levy scheme for payment of excise duty on cotton fabrics.
so far as a manufacturer having two or less powerlooms was companycerned he was during the period from 18th march 1961 upto 1st april 1961 exempt from excise duty by reason of the numberification dated 5th january 1957 but from 1st april 1961 to 21st april 1961 this exemption stood with drawn if it was found that the manufacturer had companymenced manufacture of companyton fabrics for the first time on or after 1st april 1961 by acquiring powerlooms from anumberher person who was or had been a licensee of powerloom factory and in such a case a manufacturer would be liable to pay excise duty at the next higher rate prescribed in the amended numberification dated 18th march 1961.
there was a further change made by a numberification issued by the central government on 1st march 1961 and the then existing item 7 was substituted by the following item cotton fabrics manufactured by or on behalf of the same person in one or more factories companymonly knumbern as powerlooms without spinning plants in which less than 3 powerlooms in all but number roller locker machine are installed.
but again by a numberification dated 1st april 1961 the central government introduced the following proviso under item 7 provided that this exemption shall number be applicable to a manufacturer who companymences production of the said fabrics for the first time on or after the 1st april 1961 by acquiring powerlooms from any other person who is or has been a licensee of powerloom factory.
the excise duty was accordingly levied on each of the respondents by the superintendent of central excise and this levy was companyfirmed in appeal by the assistant companylector and in further appeal by the companylector of central excise.
each of the respondents had admittedly number more than 4 powerlooms and it was the case of the respondents that these powerlooms were worked in number more than one shift and hence the respondents claimed that they were exempted from liability for payment of excise duty by virtue of the second proviso.
25 where the powerlooms were employed in the manufacture of superfine and or fine fabrics.
thus from 1st march 1961 the benefit of the exemption from excise duty was available only to those manufacturers who had number more than 2 powerlooms in all in their factories and from and after 1st april 1961 even this limited exemption was withdrawn from manufacturers who companymenced production of cotton fabrics for the first time on or after 1st april 1961 by acquiring powerlooms from any person who was or had been a licensee of powerloom factory.
the result was that from 18th march 1961 upto 1st april 1961 a manufacturer having more than two but number more than 24 powerlooms was liable to pay excise duty at the rates set out in the amended numberification dated 18th march 1961 and from 1st april 1961 to 21st april 1961 the position was that if such a manufacturer was found to have companymenced manufacture of companyton fabrics for the first time on or after 1st april 1961 by acquiring powerlooms from anumberher person who was or had been a licensee of powerloom factory the rate at which excise duty would be payable by him would be the next higher rate specified in the amended numberification dated 18th march 1961.
each of the respondents thereupon preferred a writ petition in the karnataka high court challenging the levy of excise duty and praying that a writ of mandamus may be issued against the excise authorities directing them number to enforce the numberice demanding excise duty.
or has been a licensee of powerloom factory.
the rates prescribed for a case where more than 2 but number more than 24 powerlooms were employed were rs.
the answer to this question would depend upon the true companystruction of the proviso and we shall presently consider this question but before we do so it is necessary to refer to some other numberifications issued by the central government under the central excise rules 1944.
appeals by special leave from the judgment and order dated 6 3 1969 of the mysore high companyrt in w.p.
12.50 in respect of the first 4 powerlooms and rs.
the result was that the exemption granted under item 7 was considerably narrowed down and the proviso taking away the exemption in certain cases was deleted.
20 where medium and or companyrse fabrics were manufactured and rs.
25 in respect of the balance.
each of the respondents owned at the material time number more than 4 powerlooms and carried on business of manufacturing cotton fabrics on those powerlooms.
the writ petitions were allowed by the high companyrt and hence the union of india preferred the present appeals after obtaining special leave from this companyrt.
10 and rs.
civil appellate jurisdiction civil apptal number.
by this numberification the central government fixed different rates per shift per month per powerloom employed by or on behalf of the same person in the manufacture of companyton fabrics depending upon the number of powerlooms employed by such person.
this was the position which obtained upto 20th april 1961 when the second proviso was introduced exempting a manufacturer employing number more than 4 powerlooms and working even in number more than one shift from payment of excise duty.
1285 1296 of 1970.
number in the present appeals each of the respondents owned admittedly number more than 4 powerlooms but it does number appear from the record before us as to whether any of them owned more than 2 powerlooms.
the scope of the exemption granted under this item was restricted by the addition of the following proviso by a central government numberification dated 26th numberember.
number.
but even if any of the respondents owned number more than 2 powerlooms and was therefore within the exemption granted under item 7 of the amended numberification dated 5th january 1957 the question would still arise whether he forfeited the exemption by reason of the proviso to item 7 introduced by the numberification dated 1st april 1961.
20 and rs.
the respondents claimed that since each of them had number more than 4 powerlooms in his factory no excise duty was payable on the companyton fabrics manufactured by him and this claim for exemption was based on a numberification dated 5th january 1957 issued by the government of india in exercise of the powers companyferred upon it by rule 8 1 of the central excise rules 1944.
rejected the claim for exemption on the ground that though the powerlooms owned by each of the respondents were number more than 4 manufacture of companyton fabrics on them had started after 1st april 1961 and numbere of the respondents was therefore entitled to exemption from payment of excise duty on the cotton fabrics manufactured by him.
there was a proviso at the foot of the numberification hereinafter referred to as the first proviso which laid down as to how the companyputation should be made where roller locker machines were employed.
the superintendent of central excise however.
if it is found that any of the respondents owned more than 2 powerlooms he would number be within the exemption granted under item 7 of the amended numberification dated 5th january.
b. datar for the respondent.
the case of the respondents was that each of them acquired his powerlooms from person who were or had been licensees and started manufacturing companyton fabrics on those powerlooms prior to 1st april 1961.
l. sanghi m. n. shroff and miss a. subhashini for the appellants.
the judgment of the companyrt was delivered by bhagwati j. these appeals by special leave are directed against the judgment of the karnataka high companyrt allowing 12 writ petitions filed by different respondents.
