Case: M/S. Compack Pvt. Ltd Vs. Commnr. Of Cent. Ex. &amp; Customs, Vadodara

of a kind mentioned therein. Item No.4802.20 is as under : "4802.20 - Paper or paperboard, in the manufacture of which,-(a) the principal process of lifting the pulp is done by hand; and(b) if power driven sheet forming equipment is used, the Cylinder Mould Vat does not exceed 40 inches." Composite paper and paperboard (made by sticking flat layers of paper or paper board together with an adhesive), not surface-coated or impregnated, whether or not internally reinforced, in rolls or sheets has been shown in Item No.48.07. 21. The proviso appended to the notification contains an exception thereto stating that if MODVAT credit is availed of, no such exemption shall be available to the manufacturer. The Explanation, however, raises a legal fiction that if a base paper or a paperboard, if purchased from the market, would be deemed to be duty paid. The eligibility clause contained in the notification, thus, is confined to use of base paper or paperboard used in the manufacture of printed cartons, boxes, containers and cases. A container may consist of inputs other than base paper or paperboard. It has not been shown before us that to avail the exemption, the containers are required to be manufactured only or purely from the base paper or base paperboard. Had the same been the intention of the legislation making authority, they could have said so explicitly. Once the eligibility criteria is satisfied by the assessee, as noticed hereinbefore, the conditions are required to be construed liberally. [See Commissioner of Central Excise vs. M.P.V. & Engg. Industries (2003) 5 SCC 333 ]. 22. Bhalla Enterprises (supra) laid down a proposition that notification has to be construed on the basis of the language used. Rukmani Pakkwell Traders (supra) is an authority for the same proposition as also that the wordings of some other notification are of no benefit in construing a particular notification. The notification does not state that exemption cannot be granted in a case where all the inputs for manufacture of containers would be base paper or paperboard. In manufacture of the containers some other inputs are likely to be used for which MODVAT credit facility has been availed of. Such a construction, as has been suggested by the learned counsel for the Respondents, would amount of addition of the words "only out of" or "purely out of" the base paper cannot be countenanced. The notification has to be construed in terms of the language used therein. It is well-settled that unless literal meaning given to a document leads to anomaly or absurdity, the golden rule of literal interpretation shall be adhered to. 23. In Coromondal Fertilizers Ltd. vs. Collector of Customs, Madras (1986) 3 SCC 531 ], the notification in question was as under : "GSR 547 (E). - In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby, exempts Ammonium Phosphate falling within Chapter 31 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for use as manure, from the whole of the duty of customs leviable thereon which is specified in the said First Schedule : Provided that in respect of any consignment of ammonium phosphate imported under cover of a claim for exemption from duty in pursuance of the provisions hereof, the importer shall execute a bond in such form as may be prescribed by the Assistant Collector of Customs, binding himself, in sum equal to the amount of duty ordinarily leviable on such articles, to pay on demand the duty leviable on such quantity thereof as is not proved to the satisfaction of the Assistant Collector of Customs to have been used as manure." 24. The issue raised was as to whether Mono-Ammonium Phosphate which was used as manure in the manufacture of complex fertilizers was entitled to the benefit of the said exemption notification. A further contention was raised that Mono-Ammonium Phosphate was not the only input used in the manufacture of complex fertilizers and it was also not used directly for use as manure in the manufacture of complex fertilizers. Repelling the said contentions, it was opined :. "We are afraid, we are not to ascertain the intention of the Government by a comparison of the expressions used in the two different notifications. Notification No. 178/76-Cus has been couched in clear and unambiguous language. The question is not whether for getting the benefit of exemption under the notification the appellant has used it for the production of complex fertilisers or not, but the question is whether the appellant has imported Mono-Ammonium Phosphate for use as manure. It is the case of the appellant that it has used the chemical as manure, though not directly, yet along with the mixture of Urea and muriate of Potash. It is submitted on behalf of the appellant that the mixture, is undoubtedly a fertiliser and Mono-Ammonium Phosphate being one of the components of the mixture it must be held that the same was imported into India and also used as a manure or fertiliser. In our opinion, if Mono-Ammonium Phosphate retains its physical and chemical properties in the mixture, it will be difficult to say that it was not used by the appellant as a manure within the meaning of the Notification No. 178/76-Cus." 25. The only requirement for availing the benefit of the said notification was payment of excise duty on base paper or base paperboard, wherefor also a legal fiction has been raised in the explanation appended thereto.26. The Tribunal denied the benefit of the said notification to the Appellant herein without considering the import thereof that it refers to the MODVAT credit directly that too only on base paper. Similarly, the finding of the Tribunal that the container must be manufactured only from base paper may render the exemption notification inapplicable in a large number of cases.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]18. Keeping in view the principles laid down in the aforementioned decisions, we have to construe the exemption notification in question.19. The said notification was issued in terms of sub-rule (1) of Rule 8 of the Central Excise Rules, 1944. By reason thereof , printed carton, boxes, containers and cases whether in assembled or unassembled condition falling under Chapter 48 of the schedule appended to the Central Excise Tariff Act, would receive the benefit of exemption subject to the condition that the appropriate duty of excise or additional duty leviable under Section 3 of the Customs Tariff Act has already been paid in respect of the base paper used in their manufacturing.15. In Commissioner of Central Excise, Chandigarh vs. Bhalla Enterprises [2004 (173) ELT 225 (SC)], it was heldbasic rule in interpretation of any statutory provision is that the plain words of the statute must be given effectIn Commissioner of Central Excise, Trichy vs. Rukmani Pakkwell Traders [(2004) 11 SCC 801] , it was heldis settled law that exemption notifications have to be strictly construed. They must be interpreted on their own wording. Wordings of some other notification are of no benefit in construing a particularThe said decision was followed in Commissioner of Central Excise, Chandigarh-I vs. Mahaan Dairies (2004) 11 SCC 798 ].Keeping in view the principles laid down in the aforementioned decisions, we have to construe the exemption notification in question.19. The said notification was issued in terms of sub-rule (1) of Rule 8 of the Central Excise Rules, 1944. By reason thereof , printed carton, boxes, containers and cases whether in assembled or unassembled condition falling under Chapter 48 of the schedule appended to the Central Excise Tariff Act, would receive the benefit of exemption subject to the condition that the appropriate duty of excise or additional duty leviable under Section 3 of the Customs Tariff Act has already been paid in respect of the base paper used in their manufacturing.The proviso appended to the notification contains an exception thereto stating that if MODVAT credit is availed of, no such exemption shall be available to the manufacturer. The Explanation, however, raises a legal fiction that if a base paper or a paperboard, if purchased from the market, would be deemed to be duty paid. The eligibility clause contained in the notification, thus, is confined to use of base paper or paperboard used in the manufacture of printed cartons, boxes, containers and cases. A container may consist of inputs other than base paper or paperboard. It has not been shown before us that to avail the exemption, the containers are required to be manufactured only or purely from the base paper or base paperboard. Had the same been the intention of the legislation making authority, they could have said so explicitly. Once the eligibility criteria is satisfied by the assessee, as noticed hereinbefore, the conditions are required to be construed liberally. [See Commissioner of Central Excise vs. M.P.V. & Engg. Industries (2003) 5 SCC 333 ].The only requirement for availing the benefit of the said notification was payment of excise duty on base paper or base paperboard, wherefor also a legal fiction has been raised in the explanation appended thereto.26. The Tribunal denied the benefit of the said notification to the Appellant herein without considering the import thereof that it refers to the MODVAT credit directly that too only on base paper. Similarly, the finding of the Tribunal that the container must be manufactured only from base paper may render the exemption notification inapplicable in a large number of cases.