# [1976] 2 S.C.R. 868

- **Citation:** [1976] 2 S.C.R. 868
- **Court:** Supreme Court of India
- **Decided:** 1975-12-04
- **Case number:** Civil Appeals Nos. 133-188 of 1975
- **Bench:** A. N. Ray, M. H. Beg, R. s. SARKARIA, P. N. Shinghal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1976-2-s-c-r-868-6564
- **Pages:** 4

## Headnote

Central Excise Salt Act, 1944-S. 3-Noti/ication dated 4 September. 1967
givillg concessional m'e of duty to small manufacturers of matchcs-Klwdi and
Village /!ldustries Commission-If competent to grant certificate under the notiticatidn.
For the purpose of protecting the smalier manufacturers 'from the com~ti
tion of' larger manufacturers, the Government of India, by a notification dated
21 July 1967, amended by notification dated 4 September, 1967, declared a
concessional rate of duty to those manufacturers who had filed a declaration
before 4 September 1967 that their estimated annual clearance would be Jess
than 75 million match slicks. This Court in Union of India v. Parameswamn
Match Works efc. [1975] 2 S.C.R. 573 setting aside the judgment of the High
Court holding that classification was invalid, held the classification fo1:1nded
on a particular date to be reasonable; and the concessional rate would be
availed of even by those manufacturers who came to the field after 4 September,
1967 if they satisfied the condition in clause (d) of the notification regarding
quantity of matches and are recommended by the Khadi alid Village Industries.
Commission for exemption.
The respondent filed declarations on 22 Dzcember. 1967 that they would
not produce more than 75 million match sticks during the year 1969-70 and
claimed to be entitled to the concessional rate of excise duty.
'
In appeal to this Court the rzspondents sought to support the judgment of
the High Court on the grounds ( i) that they were entitled to the exemption on
the basis of clause (d) of the notification; and (ii) that the Khadi and ViJlage
Industries CommissiOn was not competent to make any recommendation.
Allowing the appeal,
HELD : ( 1) The appeals are covered by the decision of this Court in
Parameswaran Match Works case and no case is made out by the respondents
on the basis of exemption under cl. ( d) of the notification. There is no allegation in the petition that the respondents came into the field after 4 September 1967 or that they· started manufacturing the matches after 4 September,
1967 or that they were recommended by the Khadi and Village Industries Commission.
[871 D & B]
(2) Under s. 15(h) of the Khadi and Village Industries Commission Act,
1956 the Commission may take steps in ensuring the genuineness of, and for
granting certificates to producers of, or dealers in,. Khadi or the products of any
village industry. Therefore, the Commission is competent to recommend for
exemption under cl. (d) of the Notification. [871F-G]
C1v1L APPELLATE JURISDICTION : Civil Appeals Nos. 133-188
of 1975.
[Appeals by Special Leave from the Judgments and Orders cfated
the (1) 29-4-1970, (2) 28-7-1970, (3) 12-3-1970, (4) 28-7-1970,
(5) 7-9-1970, (6) 7-4-1970 & (7) 12-3-1970 of the Madras High
Court at Madras in (1) W.P. Nos. 2929, 3253 and 68, 123 and 260
of 1970, (2) W.P. Nos. 1606 and 1607 /70, (3) W.P. Nos.
1998,
2484, 2567, 2568, 2569, 2663-65, 3046, 3125, 3126, 3182, 336365, 3410, 3508, 3555-60, 3630, 3631, 3667-3668, 3810-3812 and
I
\.
SUPDT. CENTRAL EXCISE V. AY¥ANGAR M;ATCH WORKS (Ray, C.J.) 869
3650 of 1969, (4) W.P. Nos. 2647, 2648/69 and
1121,
1451,
A
1452 and-1495 and 1496 of 1970, (5) W.P. Nos. 1912, 1913, 1919,
2123 2318 2516 and 2610 of 1970, (6) W.P. Nos. 2088, 2317 and
l,
2515f70 a~d (7) W.P. No. 3666 of 1969 respectively].
Niren De, Attorney General of India and R. N. Sachthey, for the
Appe!lants.
'·
)
I
)
,i
M. R. M. Abdul Karim and Shau/wt Hussain for the Respondents
(In Cas. Nos. 137, 140, 149, 152-155, 164, 169, 178,
179,
181,
182, 183 and 187/75.)
Mrs. S. Gopalakrishnan for the Respondents (In CA No. 177 of
1975).

## Text

A
B
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868
SUPERINTENDENT, CENTRAL EXCISE & ANR.
l'.
A YY ANGAR MATCH WORKS ETC.
December 4, 1975
[A. N. RAY, C.J., M. H. BEG, R. s. SARKARIA AND P. N. SHINGHAL, JJ.]
Central Excise Salt Act, 1944-S. 3-Noti/ication dated 4 September. 1967
givillg concessional m'e of duty to small manufacturers of matchcs-Klwdi and
Village /!ldustries Commission-If competent to grant certificate under the notiticatidn.
For the purpose of protecting the smalier manufacturers 'from the com~ti
tion of' larger manufacturers, the Government of India, by a notification dated
21 July 1967, amended by notification dated 4 September, 1967, declared a
concessional rate of duty to those manufacturers who had filed a declaration
before 4 September 1967 that their estimated annual clearance would be Jess
than 75 million match slicks. This Court in Union of India v. Parameswamn
Match Works efc. [1975] 2 S.C.R. 573 setting aside the judgment of the High
Court holding that classification was invalid, held the classification fo1:1nded
on a particular date to be reasonable; and the concessional rate would be
availed of even by those manufacturers who came to the field after 4 September,
1967 if they satisfied the condition in clause (d) of the notification regarding
quantity of matches and are recommended by the Khadi alid Village Industries.
Commission for exemption.
The respondent filed declarations on 22 Dzcember. 1967 that they would
not produce more than 75 million match sticks during the year 1969-70 and
claimed to be entitled to the concessional rate of excise duty.
'
In appeal to this Court the rzspondents sought to support the judgment of
the High Court on the grounds ( i) that they were entitled to the exemption on
the basis of clause (d) of the notification; and (ii) that the Khadi and ViJlage
Industries CommissiOn was not competent to make any recommendation.
Allowing the appeal,
HELD : ( 1) The appeals are covered by the decision of this Court in
Parameswaran Match Works case and no case is made out by the respondents
on the basis of exemption under cl. ( d) of the notification. There is no allegation in the petition that the respondents came into the field after 4 September 1967 or that they· started manufacturing the matches after 4 September,
1967 or that they were recommended by the Khadi and Village Industries Commission.
[871 D & B]
(2) Under s. 15(h) of the Khadi and Village Industries Commission Act,
1956 the Commission may take steps in ensuring the genuineness of, and for
granting certificates to producers of, or dealers in,. Khadi or the products of any
village industry. Therefore, the Commission is competent to recommend for
exemption under cl. (d) of the Notification. [871F-G]
C1v1L APPELLATE JURISDICTION : Civil Appeals Nos. 133-188
of 1975.
[Appeals by Special Leave from the Judgments and Orders cfated
the (1) 29-4-1970, (2) 28-7-1970, (3) 12-3-1970, (4) 28-7-1970,
(5) 7-9-1970, (6) 7-4-1970 & (7) 12-3-1970 of the Madras High
Court at Madras in (1) W.P. Nos. 2929, 3253 and 68, 123 and 260
of 1970, (2) W.P. Nos. 1606 and 1607 /70, (3) W.P. Nos.
1998,
2484, 2567, 2568, 2569, 2663-65, 3046, 3125, 3126, 3182, 336365, 3410, 3508, 3555-60, 3630, 3631, 3667-3668, 3810-3812 and
I
\.
SUPDT. CENTRAL EXCISE V. AY¥ANGAR M;ATCH WORKS (Ray, C.J.) 869
3650 of 1969, (4) W.P. Nos. 2647, 2648/69 and
1121,
1451,
A
1452 and-1495 and 1496 of 1970, (5) W.P. Nos. 1912, 1913, 1919,
2123 2318 2516 and 2610 of 1970, (6) W.P. Nos. 2088, 2317 and
l,
2515f70 a~d (7) W.P. No. 3666 of 1969 respectively].
Niren De, Attorney General of India and R. N. Sachthey, for the
Appe!lants.
'·
)
I
)
,i
M. R. M. Abdul Karim and Shau/wt Hussain for the Respondents
(In Cas. Nos. 137, 140, 149, 152-155, 164, 169, 178,
179,
181,
182, 183 and 187/75.)
Mrs. S. Gopalakrishnan for the Respondents (In CA No. 177 of
1975).
The Judgment of the Court was delivered by
RAY, C.J.
These appeals arise out of the judgment dated 11th
December, 1968 in writ petition No. 3838 of 1968 in
the
High
Court at Madras.
c
In the present appeals the writ petitions in the High Court were
D
allowed following the judgment of the High Court in the
aforesaid
writ petition No. 3838 of 196~.
In Civil Appeals No. 262-273 of 1971 arising out of the common iudgment dated 11 December, 1968 of the High Court at Madras in writ petition No. 3838 of 1968 this Court in the decision in
U1Zion of India.& Anr. v. M/s Parameswaran.Match Works etc.(-1)
set aside the orders of the High Court and dismissed the writ petitions.
The present appeals were not heard at that time because service
was not complete.
This Court by order dated 14 July, 1975 directed
that
these
appeals be listed for hearing on 21 November, 1975.
The
Union
made an application for consolidation of appeals, reduction of security and early hearing of the appeals.
The respondents were ~ervect
in that application.
Pursuant to that application this Court ordered
on 14 July, 1975 the hearing of the appeals on 21 November, 1975.
The respondents have entered appearance in all these appeals.
F
Jn these appeals the respondents who were petitioners in the High
Court asked for a writ of prohibition restraining the appellants froai
G
collecting any duty in excess of Rs. 3.75 per gross from the petitioners
in pursuance of notification dated 21 July, 1967 as
amended
bv
notificalion dated 4 September, 1967.
-
The case of the respondents in the High Court was
that
thev
filed declaration on 22 December, 1969. for 1969-70 that thev would
not produce more than 75 million match sticks during the fi.1rnnc-;8!
H
year.
The respondents claimed to be entitled to
the
conc<.:s5ional
(1) [1_975] 2 S.C.R. 573.
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D
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'870
SUPREME COURT REPORTS
[1976] 2 'S.C.R.
rate oi excise duty at Rs. 3.75 per gross pursuant to the noti~cation
dated 21 July, 1%7. The further case of the respondents
m
the
High Court was that the not~cation dated 4 September, 1967
1 was
issued stating that the concess10n of Rs. 3. 7 5 per gross
woulu ?c
ava!labk to such "D" Class manufacturers who had filed the dec1aration before 4 September, 1967.
The respondents cha~cnged . th.e
fixing: of the date 4 September, 1967 as an arbitrary
time - limit
making unreasonable discriminat.ion between t~e ~ame . category
of
manutaclurer simply on the basis of the apphcat10n bemg before or
after 4 September, 1967.
The respondents craved reference to the
judgment of the High Court in writ petition No. 3838 of 1~68 dated
11 December, 1968 and prayed for orders in terms of that judgment.
The l Iigh Court accepted the petition of the respondents following the juogmeot in writ petition No. 3838 of 1968 dated 11 December, 1968.
The appellants challenged the decision of the High
Court
and
relied on the decision of this Court in M / s
Parameswaran
Match
Works case (supra).
This Court in M/s
Parameswaran
Match
Works case (supra) held that the purpose of the notification dated
4 September, 1967 was to enable bonafide small manufacture1s of
matches to earn a concessional rftte of duty by filing the declaration.
Tiu: small manufacturers whose estimated
clearance in a year was
less than 75 million matches would have availed themselves of the
opportunity by making the declaration as early as possible because
they would become entitled to the concessional rate of duty on their
clearance from time to timl,\.
The purpose of the notification was to
prevent larger units who were prod ueing or clearing more than JOO
million matches in a year and who could not' have made a declaration
from splitting up into smaller units in order to avail
of the
concessional rate of duty by
making
the
declaration
subsequently.
The classification founded on a particular
date
was
hctd to be reasonable because the choice of a date was to protect the
smaller units in the industry from competition by the larger ones and
that object would have been ~rustrated if by adopting the device of
fragmentation, the larger units could become the ultimate beneficiaries of the bounty.
Counsel for the respondents relied on an
observation. of
this
Court in Mis Parameswaran Match Works case (supra) at page 576
of the Report to the effect that the manufacturers ',Vho came to the
field after 4 September, 1967 were entitled to concessional rate of
duty if they satisfied the condition prescribed in clause ( d)
of the
notification dated 4 September, 1967. In M/s Parameswaran Match
Works case (supra) the match works asked for a licence on 5 September, ·1967 for ma'aufacturing matches stating that it began the industry from 5 March, 1967 and also filed a declaration that the estimated manufacture for the financial year 1967-68 would not exceed 75
million matches.
Paramcswaran Match Works contended there that
it was denied the benefit of the concessional rate of duty on the ground
that it applied for a licence and filed the declaration on S September,
1967 after the expiry of the fixed date.
This Court held that the
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SUPDT. CENTRAL EXCISE V. AYYANGAR :MATCH WORKS (Ray, C.J.) 871
concessional rate would be availed by them who satisfied the condiA
tion laid down in the notification.
The case of the respondents as laid in the petition before the
High Court was that they were claiming an order in .terms of
~he
judgment in writ petition No. 3838 of 1968. There 1s no allegation
in the petition that the respondents came to the field after 4 September, 1967 or that they started manufacturing matches after 4 Sept~m
ber. 1967.
The notification dated 4 September, 1967 gave
relief,
inter alia, to factories mentioned in sub-clause (d) of the notification.
The factories mentioned in sub-clause (d) are those "whose production during any financial year does not exceed or is not estimated to
exceed 100 million matches and are recommended by the Khadi and
Village Industries Commission for exemption under this notification
as a bonafide cottage unit or which is set up by a cooperative society
registered under any law relatin,g to cooperative societies for the time
being in force".
There are no allegations in the petitions in the High
Court that the respondents were recommended by the Khadi
and
Village Industries Commission for exemption as
bonafide
cottage
units or were set up by cooperative society registered under any law
relating to cooperative societies.
No case was made by the respondents in the petitions on the basis of exemption under sub-clause ( d).
A contention was advanced by the respondents that the
Khadi
and Village Industries Commission was not competent to make any
recommendation as contemplated in sub-clause (d).
Section 15 of
the Khadi and Village Industries Commission Act, 1956 which speaks
of the functions of the Commission states in clauses ( c), ( d), ( f),
(g) and (h) that the Commission may take steps to provide for the
sale and marketing of khadi or of products of village industries, to
encourage and promote research in the development of village industries, to undertake, assist or encourage the development of village
industries, to promote and
encourage cooperative
efforts
among
manufacturers of khadi and persons engaged in
village
industries.
Section l?(h) specific.ally states that the Com~ission may take steps
for ensurmg the genumene~s of, and for grantmg certificates to producers of, or dealers in, khadi or the products of any village industry.
These provisions indicate that the Khadi and Village Industries
~onm1~ssion is compe~ent to grant certificates recommending village
mdustnes for exemption under clause ( d) of the notificatior, dated
4 September, 1967.
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The appeals are all covered by the decision in M/s Parameswaran
G
Match 1-Vork.s case (supra).
The appeals are accepted.
The orders
of the High Court are set aside and the
petitions
are dismissed.
There wiil be one set of costs to the appellants.
P.B.R.
Appeals allowed.
H