ivil Appeal No 1263 of 1968
Appeal by special leave from the order dated November 2 1967 of the Government of India Ministry of Finance Department of Revenue  Insurance New Delhi in Central Excise Revision Application No 1323 of 1967
K Sen SV Gupte Rameshwar Nath Mahinder Netrain and Ravinder Nath for the appellant
VA Seyid Muhammad and SP Nayar for the respondents
 SIKRI J delivered the majority Judgment on behalf of himself and BACHAWAT J HEGDE J gave a dissenting Opinion
Sikri J I have had the advantage of reading the draft judgement prepared by Hegde J but while I agree with him that there is no force in the plea of limitation advanced on behalf of the assessee in my opinion the appeal should fail on the ground that the excise duty was levied correctly as determined by the Central Government in its order dated November 2 1967
The facts are fully set out in the judgment of Hegde 21 
It is only necessary to mention a few facts in order to make this judgment readable
The assessee manufactures iron and steel products
It manufactured wires out of steel rods which had been imported by it prior to April 24 1962
Item 26AA was added to the First Schedule of the I of 1944 hereinafter referred to as the Excise Act by Finance Act No 2 1962 XX of 1962 with effect from April 24 1962
This reads as under 26 AAIRON OR STEEL PRODUCTS THE FOLLOWING NAMELY  iBarsrodscoilswiresjoi Five per cent
ad volorem pl sts girders angleschanna us excise duty for the time lsteesflatsbeamszedstr being leviable on pig iron oughpilling and all other or steel ingotsas the case rolled forced or extruded may be
shapes and sectionsnot other wise specified
ii Plates and sheets other Seven and a half per centad than plates and sheets inten valorem plus the excise duty ded for for 485 tinning and hoops and str the time being leviable on ipe all sortsincluding pig iron or steel ingots as galvanised or corrugated the case may be
and sheets
iii Uncoated plates and Seven and a half per cent
sheets intended for tin ad valorem plus the excise ning
duty for the time being le viable on pig or iron steel iv Pipes and tubes ingots as the case may be
including blanks there foreall sorts whether Five per centad valorem rolledforgedspuncast plus the excise duty for drawnannealedwelded or the time being leviable extruded
on pig iron or steel ingots as the case may be
v All other steel Five per centad valorem castingsnot otherwise sp plus the excise duty for ecified
the time being leviable on steel ingots  The short point that arises is this What is the duty leviable on the wires manufactured by the assessee out of steel rods which had already been imported  For the time being I will ignore notifications issued under r 8 1 of the rules made under the Excise Act and the amendments made by the Finance Act No 2 of 1962 and Indian Tariff Amendment Act 1963 III of 1963 to the Indian Tariff Act 1934  Wires
are mentioned in item No 26AAiTherefore we have to scrutinize the third column of item 26AAi for the rate of duty
Three points need clarification a What is the meaning of or inference derivable from the word plus  b What iS the meaning of the formula the excise duty for the time being leviable on pig iron or steel ingots c What is the import of the wordsas the case may be The word plus  in the context indicates that the rate of duty consists of 2 parts one part is ad valorem duty and the other is the excise duty calculated according to the formula given
In other words both duties have to be levied
I will presently discuss what the formula means but this is clear that the third column contemplates one duty consisting of two parts being levied
Before I discuss the meaning of the formula it will clarify matters if the import of the words as the case may be is first ascertained
These words indicate that a choice has to be made between two types of excise duties excise duty leviable on pig iron or excise duty leviable On steel ingots Sub items ii iii and iv of item 26AA use the same set of words
In sub item v excise duty leviable on steel ingots is only mentioned
This sub item consists of steel casting
This indicates that the duty is being calculated thus because steel castings have been made 486 from steel ingots
Item 26AA deals with iron and steel products
It seems to me that the context indicates that the words as the case may be denote that the excise duty leviable on pig iron is to be charged of the product is an iron product if it is a steel product then the excise duty leviable on
steel ingots is to be levied
In other words this decides the choice whether item 25 pig iron or item 26 steel ingots is to be looked at
Although 1 was not enlightened on the point by counsel during the course of the hearing I have no doubt that the Excise Department and the trade know how to distinguish a steel product from an iron product
If there is a dispute on the point it will have to be resolved in the future
Now to come to the formula the excise duty for the time being leviable on pig iron or steel ingots
 Let me give a simple problem in order to illustrate the points which  arise under this head of inquiry A manufactures a steel ingot X  in May 1961 in Jamshedpur
He pays excise duty on it in May 1961 as he removes it out of the factory
Its value is determined at the wholesale cash price at the time of removal in accordance with section 4 of the Excise Act
Steel ingot X  is sold to a manufacturer B in Faridabad who manufactures steel rods  Y   Z  out of it in May 1962 and removes them in May 1962
What is the excise duty payable on steel rods  Y   Z   Ad valorem duty is easy to calculate
What about the additional duty  We know that the steel ingot X  has paid excise duty
But this does not make any difference
The additional duty has still to be calculated under the formula
It is also plain that no excise duty is strictly leviable under sections 3 and 4 of the Excise Act on steel ingot X  as such
Not only that it does not exist any longer but duty on it has already been paid and further no duty would be leviable under section 4 for it was removed from the factory long time ago in May 1961
Therefore it is clear that the formula cannot be concerned with the particular ingot X  at all  It seems to me that what it is concerned with is the duty leviable on a hypothetical steel ingot if it had been manufactured or removed at the same time as the steel rods  Y   Z  were manufactured or removed
In the example given above under the formula the excise duty leviable under item 26 in May 1962 would have to be charged ie 3935 per metric tonne
The weight to be taken into consideration would be the weight of steel rods Y   Z  and not of the steel ingot X  out of which they were made
It seems to me that this is the true interpretation of column 3 of items 26AAi
It simply prescribes a rate of duty as the heading of column indicates
It is not concerned with actual ingots out of which other articles are made
It is not concerned with whether that steel ingot has paid excise duty or countervail 487 ing duty or not
It is a simple formula perhaps inartistically formulated
It is said that the item should be strictly construed it being a taxing enactment
But no rule or principle of construction requires that close reasoning should not be employed to arrive at the true meaning of a badly drafted entry in an Excise Act
I believe I am not stretching the language of the entry against the subject but it appears to me that in the context of scheme of the Excise Act this is the only reasonable construction to give to the entry
If it is permissible to look at the notifications issued by the Central Government which have given reliefs of various kinds they seem to me to proceed on the interpretation which I have given above
It will be noted that they do not exempt the article from the levy of duty they give relief which may in a particular case be the excise duty or countervailing duty levied on the article out of which the assessed article has been manufactured
To revert to the example given by me above notification No7062 dated April 24 1962 would exempt manufacturer B from so much of the duty of excise leviable on steel rods as is equivalent to the duty leviable under item 26 Therefore reading entry 26AAi with this notification manufacturer B  does not pay the whole of the duty leviable on steel rods  Y   Z  under col 3 item 26AA because the steel ingot which he has used had already paid the appropriate amount of duty
I am not able to appreciate how the insertion of item No 63 36 in the First Schedule of the Tariff Act or the subsequent amendment of the Indian Tariff Act 1934 by Indian Tariff Amendment Act 1963 throw any light on the interpretation of item 26 AAi
Item No 6336 is in respect of the same iron and steel products as are mentioned in item 26AA
Column 4 standard rate of duty reads The excise duty for the time being leviable on like articles if produced or manufactured in India and where such duty is leviable at different rates the highest duty and the duty so leviable shall be in addition to the duty which would have been levied if this entry had not been inserted
 The effect of this entry is to levy an additional customs duty equivalent to the prevalent excise duty on like articles produced and manufactured
In other words if the customs duty leviable under other entries in the Second Schedule on steel rods is D  an additional duty E  has to be levied equal to the excise duty leviable on steel rods ie under item 26AA
This has been called countervailing duty
488 The manufacturer India who used steel rods made in India and made wires from them was given a certain relief by notification No 77 of 1962 but the manufacturer in India who used steel rods made abroad to make wires was not first given this exemption
Later by amendments he was given a similar exemption
The  Central Excise Manual Seventh Edition at p 123 states the position thus 26AA2 Iron or Steel products falling under item No 26AA if made from another article falling under the said item or item No 63 36 of the First Schedule to the Indian Tariff Act 1934 32 of 1934 and having already paid the appropriate amount of excise or countervailing customs duty as the case maybe are exempt with effect from 24th April 1962 from so much of the duty of excise as is equivalent to the excise or countervailing customs duty payable on the said article  vide Government of India Ministry of Finance Department of Revenue Notification No 8962 Central Excise dated 10th May 1962 issued in supersession of Notification No 7762 Central Excises dated 24th April 1962 as further amended by Notifications No 9362 Central Excises dated 26th May 1962 and No 22562 Central Excisesdated 29th December 1962
 The only light thrown by these amendments
and the notifications referred to above is that it is not the idea to levy excise duty at various stages of manufacture of certain articles and this is achieved by issuing notifications giving appropriate reliefs
But if there is no relief given by notifications the full duty at the rate mentioned in col 3 of entry i of item 26 AA has to be paid
In the result the appeal fails and is dismissed with costs
Bachawat J I agree with Sikri J Hegde J This is an appeal by special leave
It is directed against the order of the Government of India in No 1323 of 1967 dated November 2 1967 rejecting the appellant s application for refund of the excise duty paid by him under protest
In order to appreciate the controversy between the parties it is necessary to set out the material facts
The appellant is a Company having a factory at Rishara in the State of West Bengal
It manufactures among other items Iron and Steel Products such as Jute Baling Hoops Wire Ropes Cold Rolled Strips Chain Pulley Blocks Electric Hoistsetc
Between December 1961 and January 1962 the appellant received various consignments of imported High Carbon Steel Wire Rods
Its opening stock of imported High Carbon Steel Wire Rods on April 24 1962 was 489 2788401 metric tons
As before the appellant manufactured wires from those steel rods even after April 24 1962
Finance No No 20 of 1962 imposed for the first time excise duty on the Iron and Steel Products and by sub el
S of sub section
2 of section 16 of the said Act an amendment was made to the First Schedule of the Central Excise and Salt Act 1944 hereinafter referred to as the Act incorporating after item 26A item 26AA
The relevant portion of that entry reads thus Iron or Steel Products
The following namely 1 Bars rodscoilswires 5 ad valorem plus the ex joists girdersangelschannels cise duty for the time teesflats beamzedstrough being leviable on pig iron piling and all other rolled and Steel Ingots as the forged or extruded shapes and case may be
section not otherwise specified
Pig Iron and Steel Ingots were already subject to excise duty under Items Nos 25 and 26 in the First Schedule of the Act
The rate of duty in the case of the former at the material time was Rs 10 per metric tonne and that of the latter Rs 3935 per metric tonne
The newly imposed duty under Item 26AA came into force on April 24 1962
The Collector of Central Excise West Bengal Calcutta by a Trade Notice Central Excise No 32 Iron and Steel Products 262 dated Calcutta the 16th May 1962 notified the procedure to be followed
By Notification No 7062 dated April 24 1962 issued in exercise of the powers conferred by rule 8 1  of the rules framed under the Act to be hereinafter referred to as the rules the Central Government exempted Iron and Steel Products falling under Item 26AA if made from Pig Iron or Steel Ingots on which the appropriate amount of excise duty has already been paid from so much of the duty of the excise leviable thereon as is equivalent to the duty leviable under Item 25 or 26 as the case may be
On the same day as per Notification No 77 of 1962 the Central Government exempted Iron and Steel Products falling under sub items 2 3 4 and 5 of Item 26AA if made from articles which have already paid the appropriate duty of excise under sub item 1  of the said Item from so much of the duty of excise as is equivalent to the duty payable under the sub item 1
Finance Act No 2 of 1962 by section 15 amended the First Schedule of the Tariff Act by adding Item No 63 36 which deals with imported Iron and Steel Products
The second column of that entry mentions the various Iron and Steel Products included therein
The items included therein are the very items set out in Sup CI69 14 490 Item 26AA of the First Schedule to the Act
The third column of that Item which specifies the levy reads thus The excise duty for the time being leviable on like articles if produced or manufactured in India and where such duty is leviable at different rates the highest duty so leviable shall be in addition to the duty which would have been levied if this entry had not been inserted On May 10 1962 the Government issued a fresh Notification No 89 of 1962 under rule 81 of the rules in supersession of the Notification No 7762 dated April 24 1962
By that Notification the Government exempted with effect from April 24 1962 Iron and Steel Products falling under Item 26AA if made from another article falling under the said Item and having already paid the appropriate amount of duty from so much of the duty of excise as is equivalent to the duty payable on the  said article
On the same day namely May 10 1962 the Government issued yet another Notification Notification No 90 of 1962 under rule 8 1 under which it exempted Iron and Steel Products falling under Item 26AA specified in column 2 of the table annexed to the Notification if made from Pig Iron or Steel Ingots on which appropriate amount of excise duty has already been paid from so much of the duty of excise leviable on such products as in excess of the duty corresponding entry in column 3 of the said table
Wire the product with which we are concerned in this case is also included in the table
That Notification contains a proviso which says Provided that if the products are made from pig iron and steel ingots on which appropriate amount of duty has not been paid the excise duty for the time being leviable on pig iron or steel ingots as the case may be shall be payable in addition to the duties specified in the appropriate entry in column 3 of the table
 On December 29 1962 the Government issued yet another Notification under rule 81 amending the Notification No 89 of 1962 issued on May 10 1962
In the place of words if made from another article falling under the said item and having already paid the appropriate amount of duty from so much of the duty of excise as is equivalent to the duty payable on the said article
 the following was substituted if made from another article falling under the said Iterm or Item No 6336 of the First Schedule to the Indian Tariff Act 1934 32 of 1934 and having already paid the appropriate amount of excise or court 491 tervailing custom duty as the case may be from so much of the duty of excise as is equivalent to the excise or countervailing custom duty payable on the said article By Indian Tariff Amendment Act 1963 Act No 363 effective from the 25th January 1963 the Indian Tariff Act 1934 was amended and after section 2 the following section was inserted namely 2a 1
Any article which is imported into India shall be liable to custom duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India
Explanation In this sub sec
the expression the excise duty for the time being leviable on a like article if produced or manufactured in India means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India or if a like article is not so produced or manufactured which would be leviable on the class or description of articles to which the  imported article belongs and where
such duty is leviable at different rates the highest duty
2 The customs duty referred to in sub section i shall be in addition to any duty imposed under this Act or under any other law for the time being in force
 On or after April 24 1962 the appellants cleared from their warehouse wires produced from the aforementioned imported Steel Rods after obtaining the required permission from the excise authorities and after paying the duty assesse
On those wires duty was assessed without taking into consideration the excise duty for the time being leviable on Pig Iron and Steel Ingots as the case may be
 At that time the Central Excise authorities proceeded on the basis that on the stock of wire in question only ad valorem duty had to be levied and not excise duty for the time being leviable on Pig Iron or Steel Ingots as the case may be On March 21 1963 the Inspector of Central Excise attached to Ms JK Steel Ltd Rishara issued the following notice COLLECTORATE OF CENTRAL EXCISE WEST BENGAL No 6 Range RIS
I Date 21 3 1963
Circle CGR
Notice of Demand for duty under rule 92 of CE Rules 1944
492 To Ms JK Steel Ltd Rishara Hooghly
Take notice that on behalf of the Central Government I hereby demand payment by you of the sum of Rs 41880130 NP Rupees four lacs eighteen thousand eight hundred one and paise thirty only within ten days from the date hereof
Particulars of Demands Quantity Rate of duty Amount of duty involved Steel Ingot Duty on 6932964 Rs3936 NP Rs27281213 MTHoops Per MT Steel Ingot Duty on 921937 Rs3936 NP Rs 3627822 MTStrips Per MT Steel Ingot Duty on 278800 Rs3936 NP Rs10971095 Wire
Total Rs41880130 No VI5AISJKSCE63183 dated 21 3 1963
Sd Inspector IC Central Excise Ms 1
K Steel Ltd Rishara
 The appellants objected to the demand in question as per their letter of March 24 1963
They contended that they had not contravened rule 92 of the rules nor was there any short levy
As per his letter of August 26 1963 the Assistant Collector of Central Excise Calcutta 4th Division confined the demand to that made under serial No 3 of the notice
The appellants paid  the same under protest and thereafter took up the matter in appeal to the Collector of Central Excise who dismissed their appeal as per his order of March 19 1964 with these observations The crucial point of this appeal is whether counter vailing import duty was paid by the appellants on the imported steel rods from which steel wires were manufactured
The appellants could not produce any documents in support of their argument that either import duty or countervailing duty equivalent to steel ingot rate was paid by them on the iron rods from which steel wires were drawn
Such duty is leviable on steel rods under tariff item No 26AA
As no such duty on steel rods was paid by the appellants countervailing 493 duty equivalent to steel ingot duty has therefore to be paid
 As against the order of the Collector the appellants went up in revision to the Central Government
The Central Government allowed the revision petition to some extent
This is what the Central Government ordered The Government of  India have carefully considered all the points raised by the petitioners but see no reason to interfere with the Collectors stated that the Steel Wires manufactured out of steel wire rods imported prior to 24 4 1962 on which no countervailing duty was paid and cleared during the period from 24 4 1962 to 10 8 1963 were subject to full duty as then leviable under Item 26AA 1 of Central Excise Tariff
However the demand for differential duty initially made on 2 3 1963 and subsequently amended vide the Asstt
Collector s order dated 26 8 1963 shall be restricted to the clearance effected during the 3 months period prior to the initial service of demand on 21 31963 that is to say up to 2112 1962 only as per the provisions of Rule 10 of Central Excise Rules 1944 which was applicable to this case
The demand in respect of clearances effected prior to 21 12 1962 is hereby set aside and consequential refund shall be granted to the petitioners
Subject to the above modifications the revision application is otherwise rejected
 Aggrieved by that order the appellants have brought this appeal
The questions that arise for decision in this appeal are 1 What is the true scope of entry No 26AA of the First Schedule to the Act  2 In considering the scope of the said entry can the Notifications issued by the Government on or after April 24 1962 be taken into consideration 3 Is the demand barred by limitation under rule 10 of the rules  One other question had been raised in the grounds of appeal namely that the order of the Central Government is vitiated as it had contravened the principles of natural justice
That contention was not pressed at the hearing
In the context of this case that contention loses much of its significance If we accept the appellant s contention as regards the scope of entry 26AA then  the fact that the Government s illegal is immaterial illegal is immaterial
If 494 on the other hand we accept the interpretation placed by the Revenue on that entry remand of the case to Central Government serves no purpose
I shall now proceed to consider the questions earlier formulated for decision
According to the assessee the true import of the clause in column 3 of entry 26AA is that goods mentioned in column 2 of that entry are dutiable at 5 per cent ad valorem plus the excise duty for the time being leviable under the Act on pig iron or steel ingot used in the production of those goods
Shri AK Sen the learned Counsel for the assessee urged that the expression leviable in that clause means leviable under the Act in other words dutiable under the Act the words Pig Iron  and Steel Ingots  referred to therein is the Pig Iron or the Steel Ingot used in manufacture of the articles on which duty is sought to be levied otherwise the word leviable becomes inappropriate
In other words according to him the second limb of the levy under that clause is attracted only when any pig iron or steel ingot dutiable under the Act is used in the manufacture of any article dutiable under sub cl
1 of entry 26AA
As the steel bars used in manufacturing the wires  with which we are concerned in tiffs case were not made out of steel ingot dutiable under the Act as they were imported bars that part of the levy is not attracted on those wires
The contention for the Revenue is that the expression the excise duty for the time being leviable on Pig Iron or Steel Ingot as the case may be sets out only a measure the rate at which the duty is leviable it has no reference to any particular material it is merely a yardstick
The argument of Dr Syed Muhammad learned Counsel for the Revenue proceeded thus The entry in question deals with two classes of products ie iron products and steel products
The assessing authority has first to decide whether a particular article is an iron product or steel product
If he comes to the conclusion that it is a steel product then he should assess the duty payable firstly by determining the ad valorem duty payable on it thereafter he must find out its weight in metric tons and add to the ad valorem duty the amount payable as excise duty under entry 26 of the First Schedule on steel ingot of that weight
If the intention of the Parliament was as suggested by the learned Counsel for the Revenue then column 3 should have read thus 5 per cent ad valorem plus excise duty at the rate for the time being leviable on pig iron or steel ingots as the case may be
 495 It is difficult to interpret the words for the time being leviable as indicating a rate
The expression leviable on pig iron and steel ingots as the case may be in my opinion has reference to pig iron or steel ingots dutiable under the Act
In fiscal legislation the terms rate is a familiar term
In fact entry 5 of the First Schedule dealing with salt speaks of rate fixed annually by a Central Act
Therefore it would have been the easiest tiring for the Parliament to convey its intention without ambiguity
At this stage it may also be noted that the clause in question refers to the excise duty and not excise duty in general
The definite article the has considerable significance
It refers to some particular excise duty
If the second part of the clause merely refers to a rate than the article the has no place in that context
It was urged on behalf of the Revenue that to accept the contention of the assessee and to hold that the second part of the
clause refers to the steel ingot used in the production of the wires is to read into the clause the words used in the production of the article in question
 It was said that such a construction is impermissible
Therefore we should not accede to that contention
I am not prepared to accept that reasoning
In fact in my opinion to accept the construction contended for on behalf of the Revenue it would be necessary for us to include the words at the rate after the words excise duty and before the words for the time being
No such difficulty arises if we accept the interpretation placed by the assessee on that clause
The expression the excise duty for the time being leviable by necessary implication refers to an article dutiable under the Act
That must necessarily be the article which is one of the components  of the article on which duly is sought to be levied
In the instant case that must be the steel ingot used in the production of the wires with which we are concerned in this case
As laid down by this
Court in CA Abraham vs ITO Kottayam and Anr1 In interpreting a fiscal statute the Court cannot proceed to make good deficiencies if there may be any the court must interpret the statute as it stands and in case of doubt in a manner favourable to the tax payer
 This Court also laid down in Commissioner of Income Tax vs Karamchand Premchand Ltd Ahmedabad2 that if there is any ambiguity of language in a fiscal statute benefit of that ambiguity must be given to the assessee
At this
stage I am tempted to recall to my mind the well known observations of Lord Russel of Killowen in Inland Revenue Commissioners vs Duke of Westminister3 viz 1  SC607612 2   742
3 1936 AC1 24
496 I confess that I view with disfavour the doctrine that in taxation cases the subject is to be taxed if in accordance with a Court s view of what it considers the substance of the transaction the Court thinks that the case falls within the contemplation or spirit of the statute
The subject is not taxable by inference or by analogy but only by the plain words of a statute applicable to the facts and circumstances of his case
 About a century ago Lord Cairns in Partington vs The Attorney Generalx observed As I understand the principle of all fiscal legislation it istiffs If the person sought to be taxed comes within the letter of the law he must be taxed however great the hardship may appear to the judicial mind to be
On the other hand if the Crown seeking to recover the tax cannot bring the subject within the letter of the law the subject is
free however apparently within the spirit of the law the case might otherwise appear to be
 Unless I am satisfied that the only reasonable interpretation that can be placed on the clause in col 3 of entry 26AA is that placed by the Revenue it is not possible to justify the impugned levy
There is yet another difficulty in accepting the interpretation tried to be placed by the Revenue on entry 26AA
According to books on steel making pig iron is the intermediate form through which almost all iron must pass in the manufacture of steel see The Making Shaping and Treating of Steel edited by Harold E Mcgannon at p 384
Therefore every steel product is also
an iron product
If the second part of the clause in column 3 of entry 26AA refers to a rate and not the duty leviable on the material used in the manufacture of the dutiable article under that entry then the question arises whether the rate in question is that at which duty is leviable on steel ingot or that leviable on pig iron
That part of the clause refers to two different materials dutiable at different rates
If on the other hand it refers
to the material from which the article on which duty is sought to be levied is made the proximate raw material and not the material from which that raw material is made then there is no difficulty in finding out the amount
Dr Syed Muhammad was not able to tell us how the assessing authorities classify articles into iron products and steel products
It is not his case that there is any recognised basis for doing so
It is also not his case that there is any prescribed procedure for deciding that question
His explanation that it is done on the basis of the practice prevailing in the trade is far from satisfactory
1  122
497 He was not able to tell us how we can ascertain that practice or what that practice is
If his contention is correct then the power of the assessing authorities to determine the nature of an article is an arbitrary power
It is undefined and unguided
The determination may vary from officer to officer
It is doubtful whether such a power is a valid power
That apart legislature is not likely to have conferred such an arbitrary power on the authorities
That difficulty will not arise if the duty under the second limb of the levy in column 3 of entry 26AA is determined on the basis of the actual material used
For the purpose of interpreting the clause in question reference may also be made to entry 6336 in the First Schedule to the Tariff Act
It may be remembered that entry as well as entry 26AA in the First Schedule of the Act were enacted simultaneously under Finance No Both these entries came into force on the same day namely on 24th April 1962 The Act and the Tariff Act are cognate legislations
In other words they are legislations which are pari materia
They form one code
They must be taken together as forming one system and as interpreting and enforcing each other
It is proper to assume from the surrounding circumstances that these two entries were introduced in pursuance of a common purpose that purpose being that the articles listed in entry 26AA whether produced out of indigenous Pig Iron or Steel Ingot or made out of imported Pig Iron or Steel Ingot must bear the same amount of duty
If the interpretation placed on entry 26AA by the learned Counsel for the assessee is accepted then it would be seen that entry by itself would not impose the duty contemplated by the second part of the clause in col 3 of entry 26AA on imported Pig Iron or Steel Ingot
Evidently in order to equalise the duty on articles made out of indigenous material as well as imported material entry 63 36 of the First Schedule to the Tariff Act was enacted
In other words that entry imposes countervailing duty and not additional duty
It was conceded by the learned Counsel for the Revenue that the duty levied under entry 6336 of the First Schedule of the Tariff Act is only a countervailing duty
If that be so that duty cannot be considered as an additional duty over and above the duty imposed under entry 26AA of the First Schedule of the Act
But it would be an additional duty if the interpretation of entry 26AA canvassed on behalf of the Revenue is accepted because according to the Revenue the rate prescribed in that entry is equally applicable to all articles mentioned therein whether manufactured from indigenous or imported material
If that be so the duty collected under entry 6336 of the First Schedule under the Tariff Act will be an additional duty and not a countervailing duty
It is true that despite entry 26AA of the First Schedule to the Act and entry 6336 of the First Schedule 498 of the Tariff Act if pig iron or steel ingot imported before April 24 1962 is used in the manufacture of an article dutiable under entry 26AA only the ad valorem duty prescribed under that entry can be levied on that article
It may be that the legislature intended it to be so or there is a lacuna in the provision
In either case the effect is the same
I now come to the question whether in interpreting a taxing entry I can take any aid from the various steps taken by the Department in implementing that levy I have earlier referred to a large number of Notifications issued under rule 8 1  of the rules
The parties have also produced before us the instructions issued by the Department on May 16 1962 in the matter of implementation of entry 26AA
I have now to see whether any aid can be taken from these instructions as well as the Notifications for finding out the true scope of entry 26AA
So far as the instructions issued by the Department are concerned there is hardly any doubt that the same are wholly irrelevant
In Craies on Statute Law Sixth Edn
at page 131 it is stated Explanatory notes regarding the working of an Act issued by a government department for the assistance of their officials are inadmissible for the purpose of construing the Act 
The same conclusion was arrived at by this Court in Commissioner Income  Tax Madras vs
K Srinivasan and K Gopalan1 At pages 502 503 of that report it is observed Helearned Counsel for the assessee however drew our attention to the directions contained in the Income tax Manual in force for a number of years and contended that the department itself placed on sub sections 3 and 4 of section 25 the same construction as was placed on them by the senior Judge in the High Court and that was the true construction of these two sub sections
This argument in our opinion has no validity
The department changed its view subsequently and amended the manual
The interpretation placed by the department on these sub sections cannot be considered to be a proper guide in a matter like this when the construction of a statute is involved
 Therefore I have to exclude from consideration the instructions issued by the Government
This takes me to the Notifications issued by the Government under rule 81 of the rules
Under section 38 of the Act all rules 1  502 503
499 made and notifications issued under the Act shall be made and issued by publication in the official Gazette
All such rules and notifications shall thereupon have effect as if enacted in the Act
The rules made have to be placed on the table of the Parliament
The Parliament can amend those rules
Section 3 8 is of no assistance
to us in the present case because the notifications referred to earlier are not those issued under the Act
They are notifications issued under rule 8 1 of the rules
Therefore their relevance has to be considered without taking any assistance from section 38
In Halsbury s Laws of England 3rd edn
36 at page 401 it is observed Where a statute provides that subordinate legislation made under it is to have effect as if enacted in the statute such legislation may be referred to for the purpose of construing a provision in the statute itself
Where a statute does not contain such a provision and does not confer any power to modify the application of the statute by subordinate legislation it is clear that subordinate legislation made under the
statute cannot alter or vary the meaning of the statute itself where it is unambiguous and it is doubtful whether such legislation can be referred to for the purpose of construing an expression in the statute even if the meaning of the expression is ambiguous
 No decision of this Court or of any of the High Courts in this country dealing with tiffs aspect has been brought to my notice
Even the Counsel for the parties were not definite about the stand that they should take
They were changing their position again
and again
On this question the opinion in English courts is not unanimous
That question came up for consideration as early as in 1871 in Ex Parte Wier In re Wier1
Sir G Mellish LJ delivering the judgment of the Court observed We do not think that any other section of the Act throws any material light upon the proper construction of this section
and if the question had depended upon the Act alone we should have had great doubt what the proper construction was but we are of opinion that where the construction of the Act is ambiguous and doubtful on any point recourse may be had to the rules which have been made by the Lord Chancellor under the authority of the Act and if we find that in the rules any particular construction has been put on the Act that it is our duty to adopt and follow that construction
 1 Ch
Appeal Cases Vol 6 p 879
500 In Re Normal Ex parte Board of Trade 1 Lord EsherMRObserved It was urged that we ought to hold the Act to be retrospective by reason of the rules and forms which have been made under it and which have a statutory force and it is said that shew that that the trustee must go back in his accounts to matters which happened before the Act came into operation
But when we look at the forms we see that they are in express terms headed so as to relate to transactions taking place after the coming into operation of the Act and therefore they supply no reason why we should depart from the ordinary rule that an Act is not retrospective
 From these observations it is clear that Lord Esher did take into consideration the subordinate legislation in considering the principal Act
In Billings vs Reed2 Lord Greene stated that The fact that the object of this Act was in substance what I have suggested can be seen from a consideration of the way in which the scheme has been framed pursuant to the Act itself and with the tacit approval of Parliament as provided in the Act
At any rate we are entitled to look at the scheme for the purpose of seeing the kind of practical treatment of these questions which Parliament has authorised
 From this observation it is seen that the learned Judge did look into the subordinate legislation in finding out the object of the Act
In Hale vs Bolton Leathers Ltd8 Somervell L J observed The county court judge was referred as we were to various paragraphs in the regulations made under the Act of 1946
He took the view that these regulations could not affect the construction of the Act
The regulation making power is conferred by section 89 sub section 1 proviso b and is as follows regulations may make such transitional or consequential provisions as appear to the Minister to be necessary or expedient having regard to the repeal of the said enactments in relation to diseases and to injuries not caused by accident including provision for modifying or winding up any scheme made thereunder  We agree that these regulations could not contradict the Act
1  373
2 3  505
501 They might we think properly be referred to as working out in detail the provisions of the Act consistently with its terms
 In Howgate vs Ganall and Anr1 Barry J observed I cannot of course have recourse to these schemes as a guide to the correct interpretation of the Act under which they were made but I am I think entitled to consider them for certain limited purposes
In Billings vs Reed1 Lord Greene HR said in reference to a scheme made under the Act The fact that the object of this Act was in substance what I have suggested can be seen from a consideration of the way in which the scheme has been formed pursuant to the Act itself and with the tacit approval of Parliament as provided in the Act
At any rate we are entitled to look at the scheme for the purpose of seeing the kind of practical treatment of these questions which Parliament has authorized
It is abundantly clear from the wording of the various schemes made under the Act that the Minister with the tacit consent of Parliament has throughout considered that war injuries  may be sustained outside the United Kingdom    The decision in Hales vs Bolton Leathers Ltda to which references has been made earlier was taken in appeal to the House of Lords
The judgment of the House of Lords is reported in 1951 ACp 531
Dealing with the question whether subordinate legislation could be taken into consideration in interpreting the principal Act lord Simonds said I much doubt whether I am entitled
to look to the regulations for guidance on the eaning of the word in sub section
1 but I will say something on this point later
 Reverting back to that topic again at p 541 of the report the learned Judge observed First if I may look at the regulations made under section 55 sub section
4 to assist in the interpretation of the word I agree with my noble and learned friend Normand in thinking that they assist or at least are consistent with this interpretation Lord Normand one of the other Judges who heard the appeal observed The National Insurance Industrial Injuries Prescribed Diseases Regulations 1948 were made under 1  274
2 3 505
502 section 55 sub section 4 and though in my opinion they cannot control the construction of the Act it is yet of some importance to consider whether they fit into the construction which I think the Act properly hears Lord Oaksey in the same case was positive that the regulations could be looked into for certain limited purposes
This is what observed I agree with your Lordships in thinking that the regulations themselves National Insurance industrial Injuries Prescribed Diseases Regulations 1948 cannot alter the meaning of the words of the statute but they may I think be looked at as being an interpretation placed by the appropriate Government department on the words of the statute Therein Lord MacDermott also took the assistance of the regulations while considering the statute
Lastly we come to the decision of the Chancery Division in London County Council vs Central Land Board1
Danckwerts J in that case referred to the regulations made under the Housing Act 1936 while construing the provisions of the Act
From the above decisions it is clear that several judges in England have referred to the subordinate legislation made under a statute for the purpose of interpreting that statute though for the limited purpose of know how the department which was entrusted with the task of implementing that statute had understood that statute
In the case of fiscal statutes it may not be inappropriate to take into consideration the exemptions granted in interpreting the nature and the scope of the impost
In the matter of fiscal legislation the initiative is in the hands of the executive
Under article 1121 of our Constitution the President shall in respect of every financial year
cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure for that year
Under sub article 3 of article 113 no demand for a grant shall be made except on the recommendation of the President
In the matter of taxation very large powers are left in the hands of the executive
Generally speaking the question of exemption is left to the discretion of the Government
It ought to be so because the exercise of that power depends on various circumstances some of which cannot be anticipated in advance
But yet the levy and exemptions are parts of the same scheme of taxation
The two together carry into effect the purpose of the legislation
For finding out the true scheme of a taxing measure we have to take into consideration not merely the levy but also 1 503 the exemptions granted
This Court in Kailash Nath and another vs State of UP and ors
1 held that the exemption granted in pursuance of a notification issued under the
UP Sales Tax Act must be considered as having been contained in the parent Act itself
This is what this Court stated therein This notification having been made in accordance with the power conferred by the statute has statutory force and validity and therefore the exemption is as if it is contained in the parent Act itself
 I do not think it is necessary for me to decide in this case the general question whether subordinate legislation can be used for interpreting a provision in the parent Act
I am not unaware of the danger in accepting that it could be so done
But for the present purpose it is sufficient to hold that for finding out the scope of a particular levy notifications issued by the executive Government providing for exemption from that levy can be looked into as they disclose the overall scheme
Even according to the learned Counsel for the Revenue the notifications referred to earlier were issued with a view to avoid double taxation
If that is so the exemption granted under those notifications provide a clue as to the scope of the levy made under Item 26AA
We have earlier seen that on the very day the levy came into force the Government had issued two notifications ie Notifications Nos 70 and 77 of 1962
Under Notification No 70 it exempted Iron and Steel Products falling under item 26AA if made from Pig Iron or Steel Ingots on which the appropriate amount of duty has already been paid from so much duty of the excise leviable thereon as is equivalent to the duty leviable under Item 25 or as the case may be under Item 26
Under Notification
No 77 it exempted Iron and Steel Products falling under subitems Nos 2 3 4 and 5 of Item 26AA if made from articles which have already paid appropriate duty of excise under subitem 1 of the said item from so much of the duty of excise as is equivalent to the duty payable under the said sub item 1
These Notifications clearly indicate that under Item 26AA there was no intention to levy double excise duty on the same material
The intention appears to be that if one article is made out of another article both of which are subject to excise duty the excise duty paid on the raw material should be deducted in putting the excise duty payable on the finished product
In addition these Notifications clearly show that the Pig Iron and Steel Ingot mentioned in el
3 of entry 26AA are those used in the manufacture of the article on which duty is sought to be levied under that entry
1 AIR 1957 SC790
504 In this connection we may also refer to Notification No 8962
Notification No 7762 referred merely to Iron and Steel Products falling under sub items 2 3 4 and 5 of item 26AA manufactured out of articles falling under sub item 1 thereof
That Notification by itself was not all comprehensive
It did not take in other articles made out of Pig Iron or Steel Ingot
It is that reason Notification No 8962 was issued on May 10 1962 under which exemption was given with effect from April 24 1962 to all Iron and Steel Products falling under Item 26AA if made from another article falling under the said item and having already paid appropriate amount of duty from so much of the duty of excise as is equivalent to the duty payable on the said article
Notifications Nos 70 77 and 89 exempted payment of excise duty on an article to the extent duty had been paid on the raw material used in the manufacture of the article dutiable under entry 26AA
All these Notifications proceeded on the basis that the second limb of the levy in column 3 of entry 26AA refers to the duty payable on the Pig Iron or Steel Ingot as the case may be used in the manufacture of an article dutiable under 26AA
But the above Notifications do not deal with the countervailhag duty levied under entry 6336 of the First Schedule to the Tariff Act
This was clearly an omission
To make good that omission the Government amended Notification No 8962 by its order dated December 29 1962
The amended Notification in addition to the exemption already given under Notification No 8962 also exempted from the payment of duty any article falling Within any of the sub items in item 26AA if made from an article on which countervailing duty has been paid under item 6336 of the First Schedule to the Tariff Act from so much of the duty of excise as is equivalent to the countervailing custom duty payable on the said article
This Notification clearly shows that the countervailing duty in question was levied on the basis that the excise duty contemplated by entry 26AA will not apply to articles made out of imported Pig Iron or Steel Ingot
Further if the legislature intended the duty under entry 6336 to be an additional duty the exemption granted would nullify the legislative mandate
To summarise the effect of the Finance No 2 Act of 1962 and the various Notifications issued for the purpose of implementing the scheme under that Act is that excise duty is leviable at the rate mentioned in column 3 of Item 26AA on pig iron or steel ingot used in the production of the article on which duty under entry 26AA is sought to be levied but to the extent any excise duty or countervailing custom duty had been paid on any of the material used in the manufacture of any of that article the same is exempt
From this scheme it is clear that when Item 26AA 505 speaks of  the excise duty for the time being leviable on Pig Iron or Steel Ingots as the case may be it refers to the excise duty payable on  the Pig Iron or Steel Ingots used in the production of the article dutiable under that item
From the above discussion it follows that the wires which are the subject matter of the levy impugned in this case are not liable to pay the duty in dispute in this case
At one Stage it was contended on behalf of the assessee that the levy under sub item 1 of Item 26AA comes into effect only when an article is made directly from out of Pig Iron or Steel Ingot as the case may be and not otherwise
It is not necessary to examine the correctness of this contention because at no stage the assessee had challenged his liability to pay ad valorem duty under
Item 26AA
He paid the same without objection nor had he claimed refund of the same
I shall now take up the question of limitation
The written demand made on March 21 1963 purports to have been made under rule 9 2 of the rules
Therein the assessing authority demanded steel ingot duty which according to it the assessee had failed to pay
Quite clearly rule 92 is inapplicable to the facts of the case
Admittedly the assessee had cleared the goods from the warehouse after paying the duty demanded and after obtaining the permission of the concerned authority
Hence there is no question of any
evasion
Despite the fact that the assessee challenged the validity of the demand made on him both the Assistant Collector as well as the Collector ignored that contention but when the matter was taken up to the Government it treated the demand in question as a demand under rule 10
The Government confined the demand to clearances effected after December 21 1962
The demand so modified is in conformity with rule 10
But the contention of the assessee is that the demand having been made under rule 9 2 and there being no indication in that demand that it was made under rule 10 the Revenue cannot now change its position and justify the demand under rule 10 at any rate by the time the Government amended the demand the duty claimed became barred even under rule 10
We are unable to accept this contention as correct
There is no dispute that the officer who made the demand was competent to make demands both under rule 92 as well as under rule 10
If the exercise of a power can be traced to a legitimate source the fact that the same was purported to have been exercise under a different power does not vitiate the exercise of the power in question
This is a well settled proposition of law
In this connection reference may usefully be made to the decisions of this Court in B Balakotaiah vs The Union of India and Ors
1 and 1  3sup
CI69 15 506 Afzal UIlah vs State of Up1
Further a common form is prescribed for issuing notices both under rule 92 and rule 10
The incorrect statements in the written demand could not have prejudiced the assessee
From his reply to the demand it is clear that he knew as to the nature of the demand
Therefore I find ass suesseeance in the plea of Limitation advanced on behalf of the For the reasons mentioned above this appeal is the Revenue is directed to refund the excess duty paid under protest
ORDER In accordance with the opinion of the appeal is dismissed with costs


Summary:
The appellant was a manufacturer of iron and steel products
It was importing steel rods from which steel wires were manufactured
April 24 1962 Finance Act No 2 1962 imposed excise duty on iron and steel products by introducing item 26AA in the Central Excise and Salt Act 1944
Under that item on wires 5 ad valorem plus the excise duty for the time being leviable on pig iron and steel ingots as the case may be was payable
Pig iron and steel ingots were already subject to excise duty under items 25 and 26 respectively
On the same day the first Schedule of the Tariff Act 1934 was amended and two Notifications Nos 70 and 77 were issued in exercise of the powers conferred by r 81 of the rules framed under the Excise Act
In the Tariff Act item 6336 which deals with imported iron and steel products was added to the First Schedule by
Finance Act No 2
1962The items included therein are the very items set out in item 26AA of the Excise Act
The standard rule of duty is mentioned as the excise duty for the time being leviable on like articles if produced or manufactured in India and the duty so leviable shall be in addition to the duty which would have been levied if this entry had not been inserted
Under Notification 70 the Central Government exempted iron and steel products falling under item 26AA if made from pig iron or steel in gots on which the appropriate amount of excise duty has already been paidfrom so much of the excise duty leviable thereon as is equivalent to the duty leviable under item 25 or 26 as the case may be
Under Notification 77 the Central Government exempted other iron and steel products falling under sub items 2 3 4 and 5 of item 26 AA if made from articles which have already paid the appropriate
excise duty under sub item 1 of item 26AA from so much of the excise duty as is equivalent to the duty payable under sub item 1
This notification was later superseded by another Notification No 89
by which the Government exempted with effect from April 24 1962 iron and steel products falling under item 26AA if made from another article falling under the said item and having already paid the appropriate amount of  duty from so much of the excise duty as is equivalent to the duty payable on the said article
On and after April 24 1962 the appellant cleared from its warehouse wires produced from the imported steel rods
The required permission from the excise authorities was obtained and the duty assessed was paid  At that time the excise authorities proceeded on the basis that only ad valorem duty had to be levied and not excise duty for the time leviable on pig iron or steel ingots  On March 21 1963 the assessing authority issued a written demand under r 92 demanding steel ingot duty which according to the authority the appellant had evaded to pay
The appellant paid the duty demanded under protest 482 and appealed to higher authorities
The Government in revision
treated the demand as one under r 10 because there was no question of any evasion by the appellant and confined the demand to clearances effected after December 21 1962
In appeal to this Court against the order of the Central Government the
appellant contended that 1 The clause excise duty for the time being leviable under the Act on pig iron or steel ingots  is attracted only when any pig iron or steel ingot dutiable under the Act is Used in the manufacture of any article dutiable under item 26AA 1 and as the steel bars used in the manufacture of wire were imported and were not made out of steel ingots dutiable under the Act that loan of the levy was not attracted to the wires and 2 The demand by the Central Government was barred by limitation under r 10
HELD 1 Per Sikri and Bachawat JJ The excise duty was levied correctly as determined by the Central Government
Item 26AA prescribes a rate of duty as the heading of its column 3 indicates
The rate consists of two parts one part is the ad valorem duty and the other excise duty
The context indicates that the words as the case may be  denote the excise duty leviable on pig iron under item 25 is to be charged if the product is an iron product if it is a steel product then the excise duty leviable on steel ingots under item 26 is to
be levied
The weight to be taken into consideration for determining the excise duty would be the weight of the products made out of iron steel ingots and not that of the pig iron or steel ingot out of which they were made
That is the duty will be the duty leviable on the hypothetical piece of pig iron or steel ingot as the case may be of the same weight as the particular products to be assessed
The duty is not concerned with the actual price of pig iron or steel ingot out of which other articles are made and it is not concerned with whether any excise duty or countervailing duty was paid on the pig iron or steel ingot used
Therefore it is irrelevant whether the article out of which the assessed article was manufactured was imported or not
486 A B F H 487 B E The effect of item 6336 in the Tariff Act is to levy a countervailing duty as an additional custom duty equivalent to the prevalent excise duty on like articles produced and manufactured
The manufacturer in India who used steel rods made in India and made wires from them was given a certain relief under Notification 77 but the manufacturer who used steel rods made abroad was not given this exemption
Later by Notification 89 and suitable amendments he was also given a similar exemption
But the item in the Tariff Act does not throw any light on item 26AA1 of the Excise Act
487 H 488 A B Assuming that it is permissible to look at the notifications issued by the
Central Government for interpreting item 26AA they proceed on the interpretation of the item that it refers to a rate
The Notifications do not exempt an article from the levy of duty they give relief which may in a particular case be the excise duty or the countervailing duty levied on the article out of which the assessed article has been manufactured
The rule that a fiscal enactment should be strictly construed does not mean that close reasoning should not be employed to arrive at the true meaning of a badly drafted entry in an Excise Act
487 A C Per Hegde J dissenting The expression leviable of pig iron and steel ingots as the case may be  has reference to pig iron or steel ingots dutiable under the Excise Act
Therefore
the wires which are the subject matter of the impugned levy in the present case are not liable to pay the duty in dispute as they were made out of imported steel rods and hence not dutiable under the Excise Act
495 A B 505 B 403 If the item 26AA refers to a rate Parliament would have conveyed such intention without any ambiguity as it has done in item 5
The words used are the excise duty 
If the clause refers to a rate the article the  has no place in the context
The expression the excise duty for the time being leviable  by necessary implication refers to an article dutiable under the Act That must necessarily be the article which is one of the components of the article on which duty is sought to be levied that is in the instant case the steel ingot used in the production of wires
Moreover pig iron is the intermediate form through which iron must pass in the manufacture of steel
Therefore every steel product is also an iron product
If the clause in item 26AA refers to a rate and not to the duty leviable on the material used in the manufacture of the dutiable article then the question would be whether the rate is that at which duty is leviable on steel ingot or that leviable on pig iron
If it merely depends on the practice prevailing in the trade then the power of the assessing authorities to determine the nature of an
article would be an arbitrary power and the legislature is not likely to have conferred such an arbitrary power on the authorities
If on the other hand
the item refers to the material from which the article on which duty is sought to be levied is made the proximate raw material and not the material from which that raw material is made then there is definiteness for the purpose of finding out the amount
495 A C E F 496 E G 497 A B Observations in CA Abraham vs ITO Kottayam   771 CITv
Karamchcmd Premchand Ahmedabad   742 Inland Revenue Commissioners vs Duke of West minister  24 and Partington vs The Attorney General  122 applied Entry 6336 in the Tariff Act and item 26AA in the Excise Act were enacted simultaneously came into force on the same day from one code and are pari materia
They were introduced in pursuance of a common purpose namely that the articles listed in item 26AA whether produced out of indigenous pig iron or steel ingot or made of imported pig iron or steel ingot must bear the same amount of duty
The duty levied under item 6336 being a countervailing duty it cannot be considered as an additional duty over and above the duty imposed under item 26AA of the Excise Act
497 C E F G For finding out the scope of a particular levy notifications issued by the executive Government providing for exemption from levy can be looked into as they disclose the overall scheme
The notifications Nos 70 77 and 89 were issued with a view to avoid double taxation and the exemption granted provides a clue to the scope of item 26AA
The effect of Finance Act 2 1962 and the various Notifications is that excise duty is leviable at the rate mentioned in item 26 AA on pig iron or steel ingot used in the production of the article on which duty under item 26AA is sought to be levied but
to the extent any excise duty or countervailing custom duty has been paid on any of the material used in the manufacture of the article the same is exempt
Therefore when item 26AA speaks of the excise duty for the time being leviable on pig iron or steel ingots as the case may be  it refers to the excise duty payable on pig iron or steel ingots used in the production of the article dutiable under that item
503 C E 504 G H Kailash Nath vs State of UPAIR  followed
2 By Full Court If the exercise of a power can be traced to a legitimate source the fact that it was purported to have been exercised under a different power does not vitiate the exercise of the power
In 484 the present case a common form is prescribed for issuing notices under rr
92 and 10 and the incorrect statements in the written demand did not prejudice the appellant as shown from its answer to the demand Therefore though the demand was made under r 92 the Revenue could change its position and justify the demand under r 10
484 E 505 D H 506 A B B Balakotaiah vs Union of India  and Afzal Ulah vs State of UP   referred to