Custom, Excise & Service Tax Tribunal
M/S Printo India Graphics (P) Limited vs Cce, Delhi-I on 28 April, 2011
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R. K. Puram, New Delhi. Date of hearing : 23.02.2011 Date of decision: 28.04.2011 For approval and signature: Honble Shri Justice R.M.S. Khandeparkar, President Honble Shri Rakesh Kumar, Member (Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982. 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Excise Appeal No. 3181 of 2010 [Arising out of order-in-appeal No. 234/CE/DLH/2009 dated 30.10.2009 passed by the Commissioner (Appeals) Central Excise-I, New Delhi]. M/s Printo India Graphics (P) Limited Appellants Vs. CCE, Delhi-I Respondent
Appearance:
Rep. by Sh. M.P. Singh, Advocate for the appellants.
Rep. by Sh. R. K, Verma, DR for the respondent.
Coram: Honble Sh. Justice R.M.S. Khandeparkar, President Honble Sh. Rakesh Kumar, Member (Technical) Oral Order No._____ Per: Shri Justice R.M.S. Khandeparkar:
Heard at length the learned Advocate for the appellants and learned DR for the respondents in terms of order dated 21.02.2011 passed in Stay application No. 2962 of 2010.
2. This appeal arises from order dated 05.11.2009. By the impugned order, the appeal filed by the appellants against order of the adjudicating authority has been dismissed. The Deputy Commissioner, New Delhi by order dated 31.03.2008 revoked the central excise registration issued to the appellants as the appellants were not engaged in manufacturing activity and had ordered recovery of wrongfully availed cenvat credit including cess to the tune of Rs.30,47,793/- while imposing equal amount of penalty.
3. The appellants obtained the registration of central excise for manufacture of blister rolls, poly foil pouches and polyester pouches classifiable under chapter heading No. 7607 and 3920 respectively of the schedule to the Central Excise Tariff Act, 1985. Pursuant to the visit to the premises of the appellants by the officers of the excise department, it was revealed that the process undertaken by the appellants involved merely slitting of jumbo aluminium foils into blister form rolls of the required sizes and thereafter printing them in multi colour as per the customers requirement. The Apex Court in CCE vs. Printorium reported in 1996 (87) ELT 432 had held that printing on plain aluminium foils does not amount to manufacture. The Tribunal in M/s S.R. Tissues Pvt. Ltd. vs. CCE, New Delhi reported in 2001 (136) ELT 367 had held that slitting/cutting of jumbo rolls into rolls of smaller sizes does not amount to manufacture. In the case of CCE vs. Swaraj Mazda Ltd. reported in 2004 (174) ELT 447 and Shree Ram Packaging vs. CCE reported in 2003 (151) ELT 640 it was held that in the absence of manufacturing process no credit is admissible. Yet it was found that the appellants had availed cenvat credit and had utilized the same towards the payment of duty on the printed aluminium foil cleared by them in contravention of the provision of Cenvat Credit Rules, 2004.
4. During the period from April 2006 to January 2008, the credit availed by the appellants was as under:-
Sl. No. Period of demand Date of SCN Amount of demand Cenvat credit Cess 1 April 06 to July 06 29.03.2007 439160 8779 2 August 06 to Dec. 06 20.7.2007 489219 10103 3 Jan. 07 to April 07 08.02.2008 477593 12035 4 May 07 to June 07 21.02.2008 383310 11487 5 July 07 to August 07 25.02.2008 471216 14138 6 Sept. 07 to Jan. 08 25.2.2008 465912 13929
5. The adjudicating authority while rejecting the contentions sought to be raised by the appellants confirmed the demand as stated above. Being dissatisfied, the matter was carried in appeal before the Commissioner (Appeals), New Delhi without any success. Hence, the present appeal.
6. While assailing the impugned order, it is sought to be contended on behalf of the appellants that the process undertaken by the appellants amounts to manufacture and hence the product is excisable and, therefore, the cenvat credit could not have been denied to the appellants. It is the contention of the appellants that the process carried out by the appellants, include cutting of the jumbo rolls to required size and then printing with the details and specifications as provided by the buyers. In addition, a coating by a chemical namely, HSL (Heat Seal Laquer) is also required in cases of printing on the back side of the roll. In case of medicines and edible products, the details like ingredients, instructions for use, date of manufacture, date of expiry are legally required to be printed on packaging materials. The final product is commercially known as blister rolls and is used for packaging the specific commodities and, therefore, the final product is commercially different and distinct in name, character and use from the input namely aluminium foil.
7. Besides, once it is held that the duty has already been paid on the final product, it is not permissible to deny the credit in respect of inputs used in the final product which is subjected to payment of duty. The legislative intent behind introducing the scheme of credit of duty paid on inputs was clearly to the avoid cascading effect of taxation. Therefore, wherever the excise duty has been paid on the final product, the credit of duty paid on inputs cannot be denied.
8. It is the further contention on behalf of the appellants that Rule 16(2) permits credit of duty paid on inputs even if they are used in repair of goods and, therefore, it is unjustified and illegal to deny the credit on the ground that the process does not amount to manufacture.
9. Even assuming that the process is not a manufacturing one then there cannot be recovery of credit, rather there could be an order for reversal of ineligible credit.
10. It is further contention on behalf of the appellants that since the credit has already been utilized for payment of duty on final product, the provision regarding levy of interest is not attracted.
11. As far as penalty is concerned, it is the case of the appellants that they entertained the bonafide belief about excisability of their final product and hence validly availed and utilized the credit. Hence the appellant cannot be subjected to penalty.
12. Reliance is placed in the decisions in the matter of Ramsay India (Pvt.) Ltd., New Delhi vs. CCE, New Delhi reported in 1985 (19) ELT 193 (Tri), Dipen Textiles (P) Ltd., vs. CCE reported in 1992 (62) ELT 430 (Tri.), Kores India Ltd. vs. CCE, Chennai reported in 2003 (152) ELT 395 (Tri.) and 2004 (174) ELT 7 (SC), Headway Lithographic Co. vs. CCE, Kolkata-I reported in 2003 (156) ELT 658 (Tri.), CCE, Chennai vs. Gautam Offset reported in 2005 (186) ELT 309 (Tri.), Laminated Packings (P) Ltd., vs. CCE reported in 1990 (49) ELT 326 (SC), S.R. Foils Ltd. vs. CCE, New Delhi reported in 2001 (138) ELT 719 (SC), Metagraphs Pvt. Ltd. vs. CCE, Bombay reported in 1996 (88) ELT 630 (SC), Johnson & Johnson Ltd. vs. Collector of Central Excise, Bombay-II reported in 1997 (94) ELT 286 in support of the case putforth by the appellants.
13. On the other hand, it is the case of the respondents that process of printing on aluminium foils and slitting /cutting the same to smaller size does not involves any activity of manufacture by the appellants. Therefore, according to the DR there is no case made out for interference in the concurrent findings arrived at by the authorities below.
14. It is further submitted by the DR that undisputed fact is that the appellants after procuring aluminium foil in roll form subject the same to the process of slitting to required size in roll form and thereafter prints such material as per the customers requirement. There is already a decision on this aspect in the matter in M/s S.R. Tissues Ltd. (supra). Taking into consideration the decision in Swaraj Mazda Ltd., Shri Ram Packaging cases, the law being very clear on the questions sought to be raised for consideration, no interference is called for in the impugned order.
15. In addition to the decision in CCE, New Delhi-I vs. S.R. Tissues Pvt. Ltd. reported in 2005 (186) ELT 385 (SC), the DR has placed reliance on the decisions in CCE, Chennai-II vs. Tarpaulin International reported in 2010 (256) ELT 481 (SC), Union of India vs. J.G. Glass Industries Ltd. reported in 1998 (97) ELT 5 (SC), Anil Dang vs. CCE, Vapi reported in 2007 (213) ELT 29 (Tri. LB), CCE, Madras vs. Paper Products Ltd. reported in 2000 (115) ELT 277 (SC), CCE, Ahmedabad vs. Printorium reported in 1996 (87) ELT 432.
16. The first point which arises for consideration in the matter is that:-
Whether conversion of plain aluminium foil in jumbo rolls into blister roll for packing medicine and items by process of cutting, slitting and printing amounts to manufacture in terms of Section 2(f) of the Central Excise Act, 1944?
17. The term manufacture has been defined under Section 2(f) as under:-
(f) manufacture includes any process, -
(i) incidental or ancillary to the completion of a manufactured?(i) product;
(ii) which is specified in relation to any goods in the Section?(ii) or Chapter notes of [the First Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to [manufacture; or]
(iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,] and the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;
18. The process undertaken by the appellants is that the jumbo roll are first cut into rolls of smaller size as per the requirement of the buyers and then they are printed with details and specifications as provided by the buyers. A chemical quoting applied in cases where printing is required on the back side of the blister rolls. In cases where the blister rolls are for the purpose of packing medicine and edible products, the details like ingredients, instructions for use, date of manufacture, date of expiry etc. which are legally required to be printed by the manufacturers of such products on the packing of their materials are also printed. The smaller rolls so manufactured are known as blister rolls and are used for packing various commodities.
19. It is the contention on behalf of the appellants as already noted above that final products which come out as above is commercially different and has distinct name, character and use from the jumbo rolls and, therefore, the process amounts to manufacture and that entitles the appellants to avail the credit.
20. In fact, the points which are sought to be raised in the matter are no more res-integra. The same already stands concluded by the decision of the Apex Court in CCE, New Delhi-I vs. S.R. Tissues Pvt. Ltd., reported in 2005 (186) ELT 385 (SC) read with the decision in Union of India vs. J.G. Glass Industries Ltd. reported in 1998 (97) ELT 5 (SC), CCE, Madras vs. Paper Products Ltd. reported in 2000 (115) ELT 277, CCE, Chennai-II vs. Tarpaulin International reported in 2010 (456) ELT 471 (S.C.) and CCE, Mumbai-V vs. GTC Industries Ltd. reported in 2011 (266) ELT 160 (Bom.).
21. The Apex Court in S.R. Tissues Pvt. Ltd. case, was dealing with the issue as to whether the process of unwinding cutting and slitting to sizes of jumbo roll of tissue paper could amount to manufacture on the first principal or under Section 2(f) of the said Act and answered the said issue that process of slitting /cutting of jumbo roll of plain tissue paper into smaller size would not amount to manufacture on the first principals as well as under Section 2(f) of the said Act.
22. In J.G. Glass Industries case, the Apex Court was dealing with the issue as to whether printing on glass bottles amounted to manufacture within the meaning of Section 2(f) of the said Act and the said issue was answered in negative and it was held that printing on bottles would not amount to manufacture within the meaning of Section 2(f) of the said Act.
23. In Paper Products case, the question was to whether there is an act of manufacture when a job worker prints a name on a film which is then utilized for the purposes of packaging and it was also answered in negative while reiterating the view expressed in J.G. Glass Industries case.
24. In Tarpaulin International case, the issue before the Apex Court was whether the tarpaulin made-ups which were prepared after cutting and stitching the tarpaulin fabric and fixing the eyelets involved process of manufacture and would fall within the definition of the said term, it was held that the process did not change the basic characteristic of the raw material and the end product. The process did not bring into existence new and distinct product with total transformation in original commodity. The original material used i.e. tarpaulin still remained and was called tarpaulin made-ups even after undergoing the process. Hence, it cannot be said that the process is a manufacturing process. The process of stitching and fixing eyelets would not amounting to manufacture process since tarpaulin after stitching and fixing eyeleting continues to be only cotton fabric. The purpose of fixing eyelets is not to change the fabric. Therefore, even though there is value addition, the same is minimum.
25. In G.T.C. Industries case, the Bombay High Court was dealing with the issue as to whether the embossing and cutting to shape of aluminium foil would be a manufacturing process. Such embossing and cutting to its shape of aluminium foil was essentially for the purpose of packing of cigarettes. The Bombay High Court after taking into consideration the decisions of the Apex Court in the matter of S.R. Tissues, Mafatlal Industries Ltd. vs. Nadiad Nagar Palika reported in 2000 (117) ELT 290 (SC), Collector vs. Technoweld Industries reported in 2003 (155) ELT 209 (SC) and Parle Products Pvt. Ltd. vs. Union of India reported in 1991 (56) ELT 52 (Bom.) held that there was nothing on record to suggest that the cut to shape/ embossed aluminium foils used for packing cigarettes was a distinct marketable commodity. Besides aluminium foil was cut to size in a continuous process and it did not emerge as a new commodity. It also reminded that the Apex Court in S.R. Tissues case has clearly held that mere mention of the product in tariff heading does not necessarily implies that the said product was obtained by process of manufacture.
26. The Tribunal also had occasion to deal with the similar points in case of CCE, Ahmedabad vs. Printorium reported in 1996 (87) ELT 432 (Tri) and in Anil Dang vs. CCE, Vapi reported in 2007 (213) ELT 29 (Tri. LB). In Printorium, the Tribunal while dealing with the issue as to whether printing of aluminium foil would amount to manufacture held that the same does not result in bringing out a new and distinct commercially known product and therefore, there was no manufacture involved therein. The decision was sought to be challenged by way of appeal to the Supreme court which came to be dismissed while relying upon the decision in J.G. Glass and the same is reported as Collector vs. Printorium reported in 1999 (111) ELT 124. The Larger Bench in Anil Dang case was dealing with the issue as to whether the slitting and cutting of duty paid plastic laminated film into smaller rolls amounted to manufacture held as under:-
The ratio of the Apex Courts judgment in Kores India Ltd. reported in 2004 (174) E.L.T. 7 (S.C.) is not applicable to the facts of the present case for the reason that in the Kores case, jumbo rolls of 210 mtrs. or more length were subject to cutting and slitting to a standard length of 10 mtrs. and 5 mtrs. and then wound and spooled into metal spools and thereafter blister packed and sealed with aluminium foils, by which process a ready to use product, viz. typewriter ribbon or telex ribbon known to the market as typewriter/telex ribbon (ready to use product) having a different and distinct use came into being, and the jumbo rolls and the ready use product were not interchangeable, while in the present case, the jumbo rolls are not cut to any specific length but only slit lengthwise into specific widths.
The judgments relied upon by the referral Bench are distinguishable from the facts of the present case inasmuch as, in the case of Indian Aluminium Cables Ltd. v. Union of India and Ors., 1985 (21) E.L.T. 3 (S.C.), the dispute related to classification of wire rods and not to manufacture thereof and the issue before the Apex Court in Laminated Packings (P) Ltd. v. CCE - 1990 (49) E.L.T. 326 (S.C.) was whether the lamination of duty paid kraft paper amounted to manufacture and the Supreme Court held that the process amounted to manufacture as kraft paper and laminated kraft paper were different distinct commodities. In the present case, however, flexible laminated film in jumbo roll is the same commodity as flexible laminated films in smaller rolls.
In the light of the above, we hold that since the decision of the Apex Court in the case of S.R. Tissues cited supra is applicable on all fours to the facts of the present case, it is required to be followed in this case, and hence answer the reference by holding that the process undertaken by the assessees herein does not amount to manufacture. The file is now returned to the referral Bench for disposal of the appeal.
27. In Kores India case, the point for consideration related to validity of demand of duty in respect of typewriter/ telex ribbon, in that regard taking into consideration the facts of the case, it was observed that a ribbon in rolls of 210 mtrs. and above in length was purchased and fed into cutting and splitting machines and ribbons of standard lengths of 10 mtrs. and 5 mtrs. were cut /slit and subsequently wound /spooled on the metal spools and 10 such spools were blister packed and sealed with aluminium foil. The assessee thus produced ribbons in spools out of jumbo rolls and the resultant product was a distinct, identifiable article having distinct name, function and use. The resultant product was also commercially distinct as understood in commercial parlance and had a separate market. Their function and use were also completely different and both products were not inter-changeable. The ribbon in jumbo rolls could not be used in a typewriter and similarly a person who required 30 pieces of spool ribbon would not be satisfied if he was offered jumbo rolls of equal length. A separate machinery and work force to manufacture ribbons in spool forms was required. When the jumbo rolls were cut into smaller size, they completely lost their identity and could not be used for same purpose as were used before cutting. Taking into consideration all these aspects, it was held that the said process amounting to manufacture. That is not the case in the matter in hand. The ribbons which were prepared out of jumbo rolls did not have the same function which the rolls in jumbo form had. In case of jumbo rolls of the aluminium foil, the utility thereof is for packing purpose as also in the blister form. In other words, the function of both the products in the case in hand is same. Equally is the case in respect of identity and character. Being so, the decision in Kores India case is clearly distinguishable.
28. In Metagraphs case, the question before the Apex Court was whether printed aluminium labels manufactured by the assessee were the products of the printing industry within the meaning of Notification No. 55/75-CE dated 01.03.75. Apparently, the issue was totally different and not relevant for the decision in the matter. Therein the labels were printed on flatbed offset printing press and the printing was done on a deep offset printing machine. The labels were meant to be fixed to refrigerators, radios, airconditioners, telephone sets etc. The Tribunal held that the printing on labels was only the incidental to its use and therefore, cannot be treated as product of printing industry. The Apex Court after considering the rival contention held as under:-
10. The label announces to the customer that the product is or is not of his choice and his purchase of the commodity would be decided by the printed matter on the label. The printing of the label is not incidental to its use but primary in the sense that it communicates to the customer about the product and this serves a definite purpose. This Court in Rollatainers case held that what is exempt under the notification is the product of the printing industry. The product in this case is the carton. The printing industry by itself cannot bring the carton into existence. Let us apply this above formula to the facts of this case. The product in this case is the aluminium printed label. The printing industry has brought the label into existence. That being the position and further the test of trade having understood this lavel as the product of printing industry. It is true that all products on which some printing is done, are not the products of printing industry. It depends upon the nature of products and other circumstances. Therefore, the issue has to be decided with reference to facts of each case. A general test is neither advisable nor practicable. We are, therefore, of the opinion that the Tribunal was not right in concluding that the printing aluminium labels in question are not products of printing industry.
(Emphasis supplied Apparently, it has not been held that every printed material is a product of printing industry. On the contrary, it has been held that inspite of printing being involved, yet it may not be a product of printing industry and each case will have to be decided on the facts of the case and no generalization can be made.
29. In Johnson & Johnson case, the issue related to the claim for exemption as the product of printing industry under Notification dated 01.11.1982 and the decision was based solely on the basis of ruling in Metagraphs case.
30. In Laminated Packings case, it was held that lamination indisputably amounted to manufacture and consequently the process of lamination of kraft paper with polyethylene, different goods came into being. The decision proceeded on undisputed principle of excise law, that lamination amounted to manufacture besides the fact that the process brought out totally different product from the inputs utilized in manufacture of such product.
31. In Ramsay India case, it was held that the base paper once converted into teleprinter rolls or taps changes its identity and nomenclature and is rendered for use only on the teleprinter machines and therefore the process of converting the writing and printing papers into teleprinter rolls and tapes was a process of manufacture under Section 2(f) of the said Act. As regards ammunition kraft paper it was held that the department had not adduced any evidence to show the nature of chemical treatment to kraft paper, the difference in characteristics and properties between the untreated kraft paper and the treated kraft paper in order to establish whether any process of manufacture in terms of Section 2(f) of the said Act was introduced or not. Obviously, the matter was decided on the facts of the case and no law as such laid down.
32. The decision in Dipen Textile & Headway Lithographic case cannot be said to lay down correct proposition of law in view of the decision of the Supreme Court in S.R. Tissues case.
33. The decision in Gautam Offset case was in the peculiar facts of the case. Therein considering that the process by which the duplex board was subjected to printing, varnishing, gumming, pasting of release papers, cutting to size and shape and for the punching to establish blister card meant for packing of pens was held to be manufacture process, as the blister card emerged as a distinct commodity through a series of processes on duplex board, being different name, character, commercial identity and use. That is not the case in the matter in hand.
34. In any case, the issues having been clearly dealt with in S.R. Tissues, Paper Products and Tarpaulin International cases by the Apex Court and further in GTC Industries case by the Bombay High Court, it is no more open to the appellants to contend that the process in question still amounts to manufacture. It is also to be noted that the decision in Paper Products case was delivered by the Bench of three Honble Judges of the Supreme Court.
35. That the bringing us to the next contention that in view of the fact that the appellants having already utilized the credit for payment of duty, the whole process involves revenue neutrality as there is no question of recovery of interest. In this regard, it would be worthwhile to take note of the recent decision of the Apex Court in the matter of Union of India vs. Ind-Swift Laboratories Ltd. reported in 2011 (265) ELT 3 (SC). Therein the apex Court was dealing with the consequences of wrong availment of credit and liability to pay interest on such credit. The Apex Court after considering the provisions of law held that bare reading of Rule 14 of the Cenvat Credit Rules would indicate that the manufacturer or provider of the output service become liable to pay the interest alongwith duty where cenvat credit had been taken or utilized wrongly or has been erroneously refunded and that the provisions of Section 11AB would apply for effecting recovery. While interpreting Rule 14 it was held that:-
15. In order to appreciate the findings recorded by the High Court by way of reading down the provision of Rule 14, we deem it appropriate to extract the said Rule at this stage which is as follows:
Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded:- Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same alongwith interest shall be recovered from the manufacturer or the provider of the output service and the provisions of Sections 11A and 11AB of the Excise Act or Sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries
16. As bare reading of the said Rule would indicate that the manufacturer or the provider of the output service becomes liable to pay interest alongwith the duty where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded and that in the case of the aforesaid nature the provision of Section 11AB would apply for effecting such recovery.
17. We have very carefully read the impugned judgement and order of the High Court. The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High court on a conjoint reading of Section 11AB of the Act and Rules 3 & 4 of the Credit Rules proceeded to hold that interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and mis-interpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. A statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same alongwith interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word OR appearing in Rule 14, twice, could be read as AND by way of reading it down as has been done by the High court. If the aforesaid provision is read as a whole we find no reason to read the word OR in between the expressions taken or utilised wrongly or has been erroneously refunded as the word AND. On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest.
18. We do not feel that any other harmonious construction is required to be given to the aforesaid expression/ provision which is clear and unambiguous as it exists all by itself. So far as Section 11AB is concerned, the same becomes relevant and applicable for the purpose of making recovery of the amount due and payable. Therefore, the High Court erroneously held that interest cannot be claimed from the date of wrong availment of CENVAT credit and that it should only be payable from the date when CENVAT credit is wrongly utilized. Besides, the rule of reading down is in itself a rule of harmonious construction in a different name. It is generally utilized to straighten the crudities or ironing out the creases to make a statute workable. This Court has repeatedly laid down that in the garb of reading down a provision it is not open to read words and expressions not found in the provision/ statute and thus venture into a kind of judicial legislation. It is also held by this Court that the Rule of reading down is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. In this connection we may appropriately refer to the decision of this Court in Calcutta Gujarati Education Society and Another v. Calcutta Municipal Corporation and Others reported in (2003) 10 SCC 533 in which reference was made at para 35 to the following observations of this Court in the case of B.R. Enterprises v. State of U.P. and Others reported in (1999) 9 SCC 700:-
81 It is also well settled that first attempt should be made by the courts to uphold the charged provision and not to invalidate it merely because one of the possible interpretations leads to such a result, howsoever attractive it may be. Thus, where there are two possible interpretations, one invalidating the law and the other upholding the latter should be adopted. For this, the courts have been endeavouring sometimes to give restrictive or expansive meaning keeping in view the nature of legislation, may be beneficial, penal or fiscal etc. Cumulatively it is to subserve the object of the legislation. Old golden rule is of respecting the wisdom of legislature that they are aware of the law and would never have intended for an invalid legislation. This also keeps courts within their track and checks individual zeal of going way ward. Yet in spite of this, if the impugned legislation cannot be saved the courts shall not hesitate to strike it down. Similarly, for upholding any provision, if it could be saved by reading it down, it should be done, unless plain words are so clear to be in defiance of the Constitution. These interpretations spring out because of concern of the courts to salvage a legislation to achieve its objective and not to let it fall merely because of a possible ingenious interpretation. The words are not static but dynamic. This infuses fertility in the field of interpretation. This equally helps to save an Act but also the cause of attack on the Act. Here the courts have to play a cautious role of weeding out the wild from the crop, of course, without infringing the Constitution. For doing this, the courts have taken help from the preamble, Objects, the scheme of the Act, its historical background, the purpose for enacting such a provision, the mischief, if any which existed, which is sought to be eliminated.. This principle of reading down, however, will not be available where the plain and literal meaning from a bare reading of any impugned provisions clearly shows that it confers arbitrary, uncanalised or unbridled power. (emphasis supplied).
19. A taxing statute must be interpreted in the light of what is clearly expressed. It is not permissible to import provisions in taxing statute so as to supply and assumed deficiency. In support of the same we may refer to the decision of this Court in Commissioner of Sales Tax, U.P. v. Modi Sugar Mills Ltd. reported in (1961) 2 SCR 189 wherein this Court at Para 10 has observed as follows:-
10In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed: it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency.
20. Therefore, the attempt of the High Court to read down the provision by way of substituting the word OR by an AND so as to give relief to the assessee is found to be erroneous. In that regard the submission of the counsel for the appellants is well-founded that once the said credit is taken the beneficiary is at liberty to utilize the same, immediately thereafter, subject to the credit rules.
36. The issue regarding the liability to repay the credit with interst clearly stands answered by the above decision of the Apex Court and needs no further elaboration.
37. For the reasons stated above, therefore, the appeal fails and is hereby dismissed.
[Justice R.M.S. Khandeparkar] President [Rakesh Kumar] Member [Technical] /Pant/ 1