1. This is a petition under Article 226 of the Constitution challenging the order of the Assistant Collector, Central Excise, dated 17-5-1983 rejecting the revised classification list of the petitioner whereby payment of Excise duty was claimed on manufacture of paper under Notification No. 46/83 as amended by Notification No. 135/83.
2. The petitioner no. 1 is a Public Limited Company having its registered office at Jaykaypur, Rayagada District Koraput in the State of Orissa where it is running a paper mill with a plant attached for making bamboo and wood pulp which is a conventional raw material for manufacturing paper. The petitioner no. 1 has also a paper mill at Chola Road, Bhopal, in the State of M P. and is manufacturing straw board, paper board and kraft paper using not less than 50 per cent by weight of pulp made out of bagasse, jute stalks, careal straw, elephant grass and waste paper which are unconventional raw material for manufacturing paper. In the Bhopal factory the total clearance of kraft paper during the financial year ending 31st March 1983 was 6329.21 metric tonnes. Paper and paper board are liable to excise duty under the First Schedule to Central Excises and Salt Act, 1944, under Section 3 thereof. Under Rule 8 of the Central Excise Rules 1944, framed under the Act, the Central Government is authorised to exempt whole or any part of duty leviable on such goods as may be notified from time to time. By Notification No. 128/77 dated 18-6-1977 certain concessional rate of duty was prescribed for certain small paper mills manufacturing paper using at least 50 per cent of unconventional raw materials. This was modified by Notification No. 46/83 dated 1-3-1983 by substituting actual clearance during the preceding financial year in place of annual capacity to manufacture paper and paper board. This was further modified by Notification No. 133/83 dated 27-4-1983 by giving concession dependent on the annual clearances of paper manufactured instead of paper and paper board manufactured as per earlier notifications. Since the petitioner no. 1 is claiming concession under item No. 2 of the revised notification as the annual clearance of kraft paper is below 7500 metric tonnes, the same is quoted hereunder for ready reference :-
"In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, in supersession of the notification of the Government of India, in the Department of Revenue and Banking No. 128/77-Central Excises, dated the 18th June, 1977, the Central Government hereby exempts paper of the description specified in column (1) of the Table annexed hereto, falling under sub-item (1) of Item No. 17 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), and containing not less than fifty per cent by weight of pulp made from bagasse, jute stalks, cereal straw, elephant grass (Imperata Cylindrica), mesta (Kenef) or waste paper, cleared for home consumption on or after the 1st day of April, in any financial year, from so much of the duty of excise leviable thereon under the said Act at the rate specified in the said First Schedule as is in excess of the amount calculated at the rates specified in the corresponding entry in column (2) of the said Table, subject to the conditions specified therein.
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3. Under the revised notification different concessional rates have been prescribed depending upon the quantity or clearance of all varieties of paper in the preceding financial year from one or more factories of a manufacturer. Rate of Rs. 560/~ per metric tonne is provided when the total quantity of clearance is 3000 metric tonnes, Rs. 900/- per metric tonne if the clearance is between 3000 to 7500 metric tonnes and Rs. 1120 per metric tonne if the clearance is 7500 to 16500 metric tonnes. The petitioners are claiming concessional rate at item no. 2. It is not disputed that if the annual clearance of their paper mill at Jaykaypur, Rayagada in Orissa is also added to the clearance of the paper manufacture in their mill at Bhopal, then the petitioners would not be entitled to concessional rate under any of these items. The petitioners would be entitled to claim concessional rate at item no. 2 only if the clearance of all varieties of paper manufactured at Bhopal only is considered. It is also not disputed that if the manufacturer has more than one factory the total quantity of clearance of all varieties of paper from all its factories have to be taken together in order to consider whether any of its factory is entitled to any concessional rate. The petitioners' case is that the total quantity of clearance of all varieties of paper manufactured out of unconventional raw material alone are to be added up and not the total quantity of clearance of all varieties of paper manufactured from its factory at Rayagada from conventional raw material which is to be excluded under the proviso to this notification. Since the petitioners follow self removal procedure under Chapter VII-A of the Central Excise Rules, they submitted a revised classification list of 3/83 dated 30th April 1983 claiming concessional rate of excise duty at Rs. 900/- per metric tonne plus 5 per cent special excise duty and cess in respect of kraft paper manufactured by its mill at Bhopal and excluding the papsr manufactured by its mill at Rayagada. The Superintendent of Central Excise, Bhopal, returned the said classification pointing out that the petitioners are entitled to claim concessional rate only if the total quantity of clearance of all varieties of paper manufactured by their factories at Bhopal and Rayagada was less than 7500 metric tonnes. So the petitioners were directed by letter dated 3-5-1983 to give particulars of total clearances of all varieties of paper manufactured at Rayagada. However, the petitioners did not furnish the necessary information regarding total quantity of clearance of all varieties of paper manufactured at Rayagada and again resubmitted the said classification list of 3/83 claiming payment of duty at concessional rate. By order dated 17-5-1983 the Assistant Collector of Central Excise, respondent No. 1, rejected the claim of the petitioner No. 1 holding that since the petitioner No. 1 did not include the clearance effected from its factory at Rayagda to the clearance of the paper manufactured at Bhopal, the eligibility for granting exemption under the revised notification does not arise and the petitioner No. 1 is liable to pay excise duty at the rate already prescribed under the schedule and not as per the revised notification. Aggrieved by this order, the present petition has been filed saying that the alternative remedy of appeal is not adequate since there is question of interpretation of the notification in question.
4. According to the return filed by the respondents, the petitioner no. 1 is entitled to concessional rate for the paper manufactured at its Bhopal mill if the total quantity of clearance of all varieties of paper manufactured from both their mills do not exceed 7500 metric tonnes per annum. But as the total quantity so manufactured exceeded 16500 metric tonnes, the petitioner No. 1 is not entitled to any concessional rate of payment of excise duty. The concessions were extended to give encouragement to small units manufacturing paper from unconventional raw material. So such a concession could not be available to big units like the petitioner No. 1 who has got more than one factory. Under the proviso to revised notification, the petitioner No. 1's factory at Bhopal alone could claim concessional rate and not its factory at Rayagada since in that factory there is a plant attached for making bamboo and wood pulp, but the paper manufactured at Rayagada has to be added up to the paper manufactured at Bhopal for deciding whether the petitioner No. 1's factory at Bhopal is entitled to the concessional rate. There is an appeal provided against the impugned order of the Assistant Collector and the petition should be thrown out on this count alone. There is no question of interpretation involved in the present case and there is no ambiguity in the notification. The petition is misconceived and is liable to be dismissed with costs.
5. Having heard counsel for the parties, we are of the opinion that there is no merit in this petition. There is no ambiguity in the notification in question and the same cannot be read in the manner suggested by the petitioners. The petitioners do not dispute that total quantity of clearance of all varieties of paper manufactured from one or more factories of a manufacturer has to be taken into consideration while deciding whether concessional rate is available or not, but their case is that since the factory at Rayagada has a plant attached for manufacturing bamboo and wood pulp the quantity of paper manufactured in that factory has to be excluded altogether because that factory is not entitled to claim any concession under the proviso to the notification. We are unable to accept this contention. The concessional rates are claimable provided the factory (i) does not have a plant attached thereto for making bamboo or wood pulp and (ii) manufactures paper out of pulp. The concessional rates under the revised notification can be claimed provided these two conditions are also fulfilled in addition that the total clearances are within the prescribed limit. This means that the Bhopal factory can claim concessional rate because it does not have a plant attached for making bamboo or wood pulp and it manufactures paper out of pulp. The concessional rate is not available to its factory at Rayagada as it has a plant attached for making bamboo and wood pulp. However, for computing the total quantity of clearance of all varieties of paper in the preceding financial year, the production of both the factories has to be added up as is clear from the notification in question. There is no ambiguity and from the plain reading of the revised notification it is clear that the production of paper from both the factories have to be added up for deciding whether concessional rate is to be given to the petitioner No. 1's factory at Bhopal. Therefore, there is no justification for consfuing the notification as suggested by the petitioners as there is no ambiguity in the notification in question. So there is no question of construing the notification liberally in favour of the petitioners and if the notification is construed in the manner suggested by the petitioners it will be causing violence to the language used. The Supreme Court in W.T. Commr., A.P. v. Court of Warda, Paigab -AIR 1977 S.C. 113 held as under-
"The object of the Wealth Tax Act is to tax surplus wealth. It is clear that all land is not excluded from the definition of assets. It is only "agricultural land" which is exempted. Therefore, it is imperative to give reasonable limits to the scope of the "agricultural land", or, in other words, this exemption has to be necessarily given a more restricted meaning than the very wide ambit given to it in AIR 1969 Andhra Pradesh 345 (FB)."
If the notification is read as suggested by the petitioners then we have to add in column 2 after the words "from one or more factories" the words "manufacturing paper from unconventional raw material". In that column no such words can be added and the words clearances of all varieties of paper from one or mote factories means from all the factories manufacturing paper arc to be taken into consideration whether or not one of the factories is also manufacturing paper from bamboo and wood pulp. This is also evident from the speech delivered by the Finance Minister while presenting the Finance Bill in the year 1980 and 83 that the purpose was to give concession to small paper mills depending upon the quantum of clearances in the financial year. So it is not correct as contended by the petitioners that the concession was given to those factories which were manufacturing paper from unconventional raw material.
6. With the result, the petition fails and it is dismissed with costs. Counsel's fee Rs. 200/-, if certified. The outstanding security amount be refunded to the petitioners.