Eastern Coalfields Ltd. Vs. Commissioner, Customs & Central Excise, M.P
 Insc 464 (1
Bhan & Markandey Katju
(with C.A. Nos.1968-1971/2003 and 8403-8404/2003) MARKANDEY
Appeal No. 2408 of 2001 has been filed against the impugned order dated
30.11.2000 passed by the Customs, Excise and Gold (Control) Appellate Tribunal,
have heard learned counsel for the parties.
facts of the case are that the Central Electrical and Mechanical Workshop at Korba
was established by the appellant, M/s. South Eastern Coalfields Ltd., at Korba
in 1967 to facilitate repair of all mining machinery and equipment used in the
adjacent coal mines and other collieries. The Central Government declared this
workshop as a mine under the provisions of Section 82 of the Mines Act, 1952
under certificate dated 1.5.1969.
2(J)(viii) of the Mines Act states that mine includes "All workshop
situated within the precincts of a mine and under the same management and used
solely for purposes connected with that mine or a number of mines under the
same management." Notification No.63/95-CE dated 16.3.1995 was issued by
the Central Government under Section 5A(1) of the Central Excises and Salt Act,
1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise
(Goods of Special Importance) Act, 1957 exempting all goods manufactured in a
mine from duties of excise and additional duties of excise. The explanation to
that notification stated that the word "mine" will have same meaning
as assigned to it in clause (j) of Section 2 of the Mines Act, 1952.
cause notice was issued to the appellant by the Superintendent of Central
Excise, Range-Korba vide office letter dated 3.9.1996 for recovery of central
excise duty amounting to Rs.31,59,704/- under the provisions of Rule 9(2) read
with Section 11A of the Central Excise Act, 1944, alleging contravention of
Rules 9(1), 52A, 53, 173B, 173C, 173G, 174 and 226 read with Notification
No.63/95-CE dated 16.3.1995 as amended. Further, for the contravention of the
aforesaid Rules imposition of interest and penalty was also proposed. In the
show cause notice it was stated that the appellant did not appear to be
entitled to the exemption as provided in Notification No.63/95-CE dated
16.3.1995 as amended.
appellant submitted its reply to the show cause notice, on 6.10.1998, in which
they referred to their earlier letter dated 5.9.1998 submitted with reference
to the earlier show cause notice. The appellant was also heard personally.
of the appellant was that the workshop is situated within the precincts of a
mine and hence was entitled to the exemption under the Notification No.63/95-
Commissioner by his order dated 22.6.1999 held against the appellant and
ordered the payment of duty amounting to Rs.31,59,704/- as mentioned in the
show cause notice and also directed recovery of interest and penalty for
contravention of various rules.
appellant filed an appeal before the CEGAT, which by order dated 30.11.2000
held that the goods produced by the appellants, were dutiable and the appellant
would not entitled to the exemption contained in the Notification No.63/95-CE.
The Tribunal confirmed the demand of excise duty under the order of the
Commissioner but set aside the penalty imposed on the appellants. Aggrieved,
this appeal has been filed in this Court.
opinion, this appeal deserves to be allowed. As already stated above, the
exemption under Notification No.63/95-CE dated 16.3.1995 exempted all goods
manufactured in a mine from excise duty. The Explanation to the exemption
notification states that "mine" has the meaning assigned to it in
Section 2(j) of the Mines Act, 1952. Clause (viii) of Section 2(j) of the Mines
Act, 1952 defines "mine" to include "all workshops and stores
situated within the precincts of a mine and under the same management and used
solely for the purposes connected with the mine or a number of mines under the
question, therefore, in this case is that "whether the workshop in
question can be said to be situated within the precincts of the mine".
the Tribunal reliance was placed by the learned counsel for the assesse on an
earlier order of the Tribunal in Central Coalfields Ltd. vs. CCE, Jamshedpur dated 16.9.1997, in which it was
held that the word "precincts" cannot be restricted to an area of
four Kms. In that case the Tribunal held that the workshop in question was
situated within the precincts of the mines to which it was catering, even
though it was situated at a distance of 50 Kms. from the said mine.
present case the Tribunal rejected the assessee's claim for exemption on the
ground that since the mine was registered under the Factories Act, it cannot
have the benefit of exemption in the Notification No.63/95-CE since as per
Section 2(m) of the Factories Act a factory means any premises including the
precincts thereof but does not include a mine subject to the operation of the
Mines Act, 1952.
opinion the registration of a mine under the Factories Act has nothing to do
with the assessee's claim for exemption under the Central Excise Act. In fact
the reference to the Factories Act itself was wholly irrelevant and we fail to
see what the Factories Act has to do with the present case. The present case is
covered by the Central Excise Act and has nothing to do with the Factories Act.
the view taken by the Tribunal is, with due respect to it, clearly erroneous.
It has to be considered in the present case whether the workshop in question is
said to be a workshop within the precincts of a mine.
word 'precincts' is not a word of clear import which has a single, clear-cut
meaning. Collin's English Dictionary defines 'precincts' to mean "the
surrounding region or area".
New Shorter Oxford English Dictionary, the word 'precinct' is shown to have
several meanings among which are the following:
area within the boundaries (real or imaginary) of a building or place; the
grounds; the interior; esp. an enclosed or clearly defined area around a
cathedral, college, etc. Also, the surroundings or environs of a place."
In the Advanced Law Lexicon, 3rd Edition, by P.Ramanatha Aiyar, the word
'precinct' has been shown to have several meanings including a space enclosed
by walls or other boundaries.
Black's Law Dictionary, 7th Edition, the word 'precinct' is defined as follows:
geographical unit of government, such as an election district, a police
district, or a judicial district." From a perusal of the above
definitions, it appears that the word "precincts" does not have a
single meaning, rather it has several meanings.
word can have several meanings, and one meaning can have several words
(synonyms). For instance, the word 'ball' can mean a round object for playing games
like cricket, football, etc; it can also mean a dance; it can also mean having
a nice time, etc. Similarly, in Sanskrit the words "kamal", "pankaj",
"rajeev", "neeraj", "jalaj", "saroj",
etc. have the same meaning i.e. Lotus.
to the literal rule of interpretation, if the meaning of a word or expression
is clear, there is no scope for interpretation and we have to follow the plain
and grammatical meaning.
where the meaning of a word or expression is not clear, obviously the literal
rule of interpretation cannot be applied, and hence we have to take resort to
other rules of interpretation e.g. the Heydon's mischief rule, the purposive
rule, etc. In our opinion in the present case the purposive rule should be
applied. Under this rule, we have to see the purpose for which the provision
at it from this angle, we are of the opinion that the word 'precincts' has to
be given the broader meaning and not the narrower meaning.
other words, we have to interpret the word 'precinct' in the exemption
notification to mean the surrounding region or area, as defined in Collins
English Dictionary or the surroundings or environs of a place as defined in the
New Shorter Oxford English Dictionary. This is because the purpose of the exemption
notification is to grant exemption from excise duty to goods produced in a mine
so as to encourage the mining industry. A workshop which is in an area in the
environs of a mine and is existing solely for the purpose connected with the
mine and under the same management, is obviously directly serving the mining
operations. Hence, we have to interpret the notification so as to include such
a workshop within the definition of a mine for the purpose of grant of
exemption, as that would encourage the mining industry.
the reasons given above the appeal is allowed.
impugned order is set aside. No costs.
Appeal Nos. 1968-1971/2003 & 8403-8404/2003 In view of the decision in
Civil Appeal No. 2408/2001, these appeals are allowed. The impugned orders are
set aside. No costs.