(c)so alter the limits of the proposed reserved forest as to exclude the tract over which rights of way or water extend or to exclude forest land of sufficient extent and in a locality reasonably convenient for the purpose of the claimants with regard to pasturage or other forest produce and the land so excluded may be either outside the boundaries of the forest as finally settled or within them, in which latter case, it shall be demarcated and notified as an enclosure within which the rules relating to reserved forests shall not apply; or