V. Ramaswami, J.:— In this batch of writ petitions the validity of Notification No. 137 of 1981, Central Excise, dated 2-7-1981, issued by the Central Government in exercise of their powers under Rule 8(1) of the Central Excise Rules, 1944 giving exemption to a limited extent in respect of excise duty leviable on certain conditions is questioned. In Form the petitioners have prayed for a writ of Mandamus directing the Union of India and the Superintendent of Central Excise to forbear from collecting excise duty on matches in excess of that which is payable under Notification No. 42 of 1981. All these petitioners are manufacturers of matches without the aid of power who may be hereafter designated as non-mechanised sector manufacturers. In order to appreciate the point raised in these writ petitions, it is necessary to set out the Notification which have a relevance to the question. Notification No. 42 of 1981 issued under rule 8 reads as follows:—

“GSR…. In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts matches in or in relation to the manufacture of which none of the following mechanical processess, namely:—

(i) box making;

(ii) frame filling;

(iii) dipping of splints in the composition for match heads;

(iv) filling of boxes with matches;

(v) labelling and banderolling; and

(vi) packaging,

2. Is ordinarily carried on with the aid of power, falling under item No. 38 of the First Schedule to the Central Excises and Salt Act, 1944 (t of 1944) and cleared for home consumption by a manufacturer from so much of the duty of excise leviable thereon as is in excess of Rs. 4.50 per gross boxes of 50 matches each:

Provided that—

(i) in the case of matches packed in boxes in which both the outer slide as well as the inner slide are made of cardboard, the amount of exemption shall be increased by sixty paise per gross of boxes;

(ii) in the case of matches packed in boxes in which the inner slide alone is made of cardboard, the amount of exemption shall be increased by twenty-four paise per gross of boxes;

(iii) the amount of exemption shall be increased, or further increased, as the case may be, by fifty paise per gross of boxes if bamboo is used for the splints or for both splints and veneers;

(iv) if the splints of such matches are made of bamboo and the matches are packed in boxes of 40s, the rate of duty shall be four-fifths of the rate applicable to matches of general description produced in the same factory but packed in boxes of 50s and if some packing in boxes of 50 is not done, it shall be four-fifths of the notionally determined rate for matches packed in boxes of 50s.

2. This notification shall come into force on the 1st day of April, 1981.”

3. This Notification was amended by Notification No. 140 of 1981, dated 2nd July, 1981 which reads as follows:—

“GSR…. In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby makes the following further amendments in the Notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 42/81-CE, dated the 1st March, 1981, namely:—

In the said Notification:

(1) before clause (ii), the following clause shall be inserted, namely:—

(i) the process of giving the veneer flats or strips the configuration of a match box including the outer slide or the inner slide with the use of match paper,

(ii) for clauses (v) and (vi), the following clauses shall be substituted, namely:—

“(v) the process of affixing labels, by pasting or any other means on match boxes or veneers;

(vi) banderolling; and

(viii) packaging;”

(2) In the first proviso—

(a) clauses (i) and (ii) shall be omitted; and

(b) in clause (iii), the words “or further increased as the case may be” shall be omitted;

(3) after the first proviso, the following proviso shall be inserted, namely:—

“Provided further that nothing contained in this notification shall apply to matches packed in boxes in which the outer slide or the inner slide or both are made of cardboard.”

2. This Notification shall come into force on the 1st day of October, 1981.”

4. What is relevant to be noted in Notification No. 140 of 1981 is the deletion of clauses (i) and (ii) of the first proviso.

5. On the same day, the Central Government issued Notification No. 137 of 1981, dated 2-7-1981, which reads as follows:—

“GSR… In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts matches of the description specified in column (2) of the table hereto annexed and falling under item 30 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and cleared for home consumption by a manufacturer from so much of the duty of excise leviable thereon as is in excess of the duty specified in the corresponding entry in column (3) of the said table.

THE TABLE S. No. Description of matches Rate of duty (Rs. per gross of boxes of 50 matches each) 1. Matches packed in boxes in which the outer slide alone is made of cardboard 5.50 2. Matches packed in boxes in which the inner slide alone is made of cardboard 5.26 3. Matches packed in boxes in which both the outer slide as well as inner slide are made of cardboard. 4.90

Provided that—

(i) the amount of exemption shall be increased by fifty paise per gross of boxes if bamboo is used for the splints or for both splints and veneers;

(ii) if the splints of such matches are made of bamboo and the matches are packed in boxes of 40s, the rate of duty shall be four-fifths of the rate applicable to matches of identical description produced in the same factory but packed in boxes of 50s and if such packing in boxes of 50s is not one, it shall be four-fifths of the notionally determined rate for matches packed in boxes of 50s:

Provided further that an officer not below the rank of an Assistant Collector of Central Excise is satisfied that the sum total of the value of the capital investment made from time to time on plant and machinery installed in the industrial unit in which the said matches, under clearance, are manufactured, is not more than Rs. 20 lakhs.

Explanation.— While determining the sum total of the value of the capital investment, only the face value of the investment at the time when such investment was made shall be taken into account, but the value of the investment made on plant and machinery which have been removed permanently from the industrial unit or rendered unfit for any use shall be excluded from such determination.

2. This Notification shall come into force on the 1st day of October, 1981.”

6. It may be seen from these notifications that upto 1st July, 1981, the petitioners were liable to pay excise duty at the rate of Rs. 4.50 per gross boxes of 50 matches each and they were getting a further reduction in cases where the matches were packed in boxes in which both the outer slide as well as the inner slide was made of cardboard, in cases where such matches were packed in boxes in which the inner slide alone was made of cardboard. The further concession available under the two provisos in the Notification No. 43 of 1981 which were deleted came in a modified form in Notification No. 137 of 1981. Instead of Rs. 4.50 with a further concession with reference to the use of cardboard either for inner slide or for both the outer slide as well as the inner slide, under Notification No. 137 of 1981, in cases where matches were packed in boxes in which the outer slide alone was made of cardboard, the petitioners were given a concessional levy of Rs. 5.50 and those” cases where matches were packed in boxes in which the inner slide alone was made of cardboard, the concessional levy was Rs. 5.26 per gross of boxes of 50 matches each. Similarly, for matches packed in boxes in which the outer slide as well as the inner slide was made of cardboard, a duty of Rs. 4.90 per gross of boxes of 50 matches each, was levied. This was subject to the further condition that the sum total of the value of the capital investment made from time to time on plant and machinery installed in the industrial unit in which the said matches are manufactured was not more than Rs. 20 lakhs.

7. There is no dispute that each of these petitioners satisfied the condition relating to the capital investment. The argument of the learned counsel for the petitioners in all these cases is that while granting exemption from the whole or any part of the duty under Rule 8, the Central Government can impose such conditions which are germane or relevant to the particular excisable commodity only and the conditions imposed in notification No. 137 of 1981 are neither germane nor relevant for the purpose of such exemption. The learned counsel also pointed out that under item 38 of First Schedule framed under Sec. 3 of the Central Excises and Salt Act, 1944, the word ‘matches’ is also defined. The container of the boxes in which the matches are packed and sold or the material used for making such boxes, have no relevance to the match sticks which are subjected to excise duty and therefore fixing a concessional rate of duty with reference to the use of cardboard either for inner slide or outer slide or both, is beyond the powers of the Central Government under the Act or under Rule 8 of the Rules.

8. Before dealing with this argument, it is necessary to briefly set out the relevant provisions relating to exemption. Under Sec. 3 of the Act, excise duty is levied on all excisable goods produced or manufactured in India at the rates set forth in the First Schedule. ‘Excisable goods’ is defined in Sec. 2(d) as meaning goods specified in the First Schedule as being subject to a duty of excise. The rule making power of the Central Government is contained in Sec. 37. Rule 37(2)(xvii) states that such rules may ‘exempt any goods from the whole or any part of the duty imposed by this Act’. The relevant portion of rule 8 which authorised exemption from duty in special cases reads as follows:—

“The Central Government may, from time to time, by notification in the Official Gazette exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of duty leviable on such goods.”

9. Item 38 of the First Schedule relates to matches and it states that the rate of duty payable in respect of that item at the relevant date was sixty-five naya paise for every 1000 matches or fraction thereof. It also defines “‘match’ as including ‘a firework in the form of a match’; and where a match stick has more heads than one capable of being ignited by striking, each such head shall be deemed to be a match.”

10. The argument is that the definition of ‘match’ does not include the boxes in which matches are packed and under Rule 8, though exemption from the whole or part of excise duty leviable could be granted subject to such conditions as may be specified by the Central Government, such conditions should relate either to the subject matter of taxation, namely, matches, or to the process of manufacturing, but not to the boxes in which the same is packed and sold. In this connection, the learned counsel relied on two decisions of the Supreme Court reported in P.J Irani v. State of Madras, AIR 1961 SC 1731 and Jyoti Prasad v. Union Territory of Delhi, AIR 1961 SC 1602, where certain general discussions on powers of exemption are made. In the decision in P.J Irani v. State of Madras, AIR 1961 S.C 1731, the Constitutional validity of S. 13 of the Tamil Nadu Buildings (Lease and Rent Control) Act (25 of 1949) was considered. Though the provision was in general terms, the Supreme Court upheld the validity on the ground that there was enough guidance afforded by the preamble and operative provisions of the Act for the exercise of the discretionary power vested in the Government, so as to render any action taken under the said provision not open to attack on the ground of denial of equal protection of the laws. In the other decision also, the Supreme Court had taken a similar view with reference to S. 19 of the Slum Areas (Improvement and Clearance) Act, 1956 (Central Act 96 of 1956). In these writ petitions, the Constitutional validity of rule 8 itself is not questioned and in fact it could not be questioned in view of the decision of the Supreme Court in Orient Weaving Mills v. Union of India, AIR 1963 S.C 98, where the rule was questioned as excessive delegation, but that contention was rejected by the Supreme Court and the rule was held to be valid. As may be seen from all these judgments, though wide discretionary powers are conferred on the Government in the matter of granting exemptions, any particular order could be questioned if it was contrary to the provisions of the Act or that the conditions imposed thereunder for getting the concessions are neither germane or foreign to the particular item in respect of which the condition is imposed or that it is not consistent with the operative provisions of the Act itself. We have seen number of instances where the exemption was based on the process of manufacture, as, for instance, those manufactured in the mechanized sector and those manufactured in the non-mechanized sector and when the validity of such exemption was questioned, it was upheld by the Supreme Court in Orient Weaving Mills v. Union of India, AIR 1963 S.C 98, and also in a decision of the Kerala High Court reported in Western India Plywood Ltd. v. Union of India, ILR 1972-2-Ker 157. In fact, in the judgment of the Supreme Court, there are certain observations which go to show that if the differential taxation was based on production by different processes or by different agencies, it was valid. In that case, a concessional levy in favour of goods manufactured by a Co-operative Society was also upheld. Similarly, differential levy on the sliding scale was upheld in Jaswant Sugar Mills v. Union of India, AIR 1964 Punjab 192. We may add that if the differentiaf levy was based on the use of particular material as stick for the match, that will be having a direct bearing on the matches and that could also be sustained. Boxes as such, as pointed out by the learned counsel for the petitioners, are not covered by the definition of ‘Matches’ under item 38 of the First Schedule to the Act. But the learned counsel for the revenue pointed out that the definition of ‘matches’ in item 38 is only an inclusive definition and having regard to the fact that safety match is one which has a striking substance which can be ignited by friction with a particular substance, matches without a container box containing the particular substance for ignition is not a consumable object and that, therefore, the definition must be deemed to include the container as well. He also pointed out that rules 62 and 63 contemplate manufacture and sale of matches only in boxes and booklets and not as matches unpacked. He also pointed out that the packing material is of such a nature, that it should be taken as part of goods sold, as the containers are not either reclaimable article or they have no value after their use. In those circumstances, according to the learned counsel, the concession granted with reference to the material used for making the boxes cannot be said to be not relevant or not consistent with the provisions or the purposes of the Act. We are of the view that the learned counsel for the revenue is well founded in his contentions. As may be seen from a reading of the provisions of the Act, a duty is levied under the Act on the basis of weight or at a fixed tariff or ad valorem. Sec. 4 deals with the valuation of excisable goods for purposes of charging of duty of excise. ‘Value’ is defined in S. 4(4)(d) in relation to any excisable goods as meaning ‘Where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee’. Though this definition is given with reference to excisable goods where duty is payable on value, the reference to the packing being durable in nature and returnable by the buyer to the assessee is irrelevant and the provisions do take note of the packing material in which the commodities are packed and sold. As we have noticed already, the exemption given having regard to the manufacturing process has been upheld by the courts and we are of the view that exemption can be given having regard to the consumer and the class of consumers or depending on the policy of the Government either to discourage or encourage the consumption of such excisable goods by making it more expensive or less expensive. The learned counsel for the revenue contended that in the case of user of veneer for making boxes, it was labour intensive and therefore may be costlier, whereas cardboards are machine manufactured and less costlier and the Government considered the use of cardboards for making match boxes as a factor which should be taken into account. We cannot say that the conditions imposed by the Notification were either arbitrary or irrational. The policy of the Government varies and depends on a number of economic factors taken into account. The courts neither have the where-withal nor the equipment to decide the wisdom of that policy. Nor can we question a policy of the Government, so long as the conditions imposed have a relevance to the exemption as such. The purpose of the Act also though to consolidate and amend the law as seen in the long title would include control of the production and the manufacture.

11. It was next contended by the learned counsel that the policy of the Government as seen from the various notifications issued, does not seem to be consistent. Sometimes, the use of the cardboard boxes are encouraged and the use of veneer boxes are discouraged and on other occasions vice versa, and there is no consistent policy. We are unable to agree that on that ground the impugned notification could be questioned. On the ground that the policy is not static, one cannot question a notification issued under Rule 8; nor can we expect a policy to be static. It will have to vary from time to time and according to the circumstances and economic considerations. In the circumstances, therefore, we are unable to hold that the differential duty based on the use of cardboard boxes is not authorised by Rule 8 of the Central Excise Rules. Accordingly, these writ petitions are liable to be dismissed and they are dismissed. The rule nisi is discharged. There will be no order as to costs.