Hindustan
Steelworks Construction Ltd. Vs. Limestone and Dolomite Mines Welfare and Cess
Commissioner & [1996] INSC 994 (21 August 1996)
Punchhi,
M.M.Punchhi, M.M.Manohar Sujata V. (J)
CITATION:
JT 1996 (7) 466 1996 SCALE (6)130
ACT:
HEAD NOTE:
THE
21ST DAY OF AUGUST,1996 Present:
Hon'ble
Mr.Justice Madan Mohan Punchhi Hon'ble Mrs.Justice Sujata V.Manohar Dr.Sankar Ghosh,
Sr.Adv. and P.P.Singh, Adv. with him for the appellant. W.A. Qadri, Adv. for
C.V.S. Rao, Adv. for the Respondents O R D E R The following Order of the Court
was delivered:
Hindustan
Steelworks Construction Ltd. V. Limestone and Dolomite Mines Welfare and Cess
Commissioner and Anr.
O R D
E R
The
appellant herein, Hindustan Steelworks Construction Limited, is a company owned
by the Government of India. It owns mines from which limestone is extracted. It
is the case of the appellant that it is using such limestone in the
construction work for expansion of Hindustan Steel Ltd., Bhilai Steel Plants,
which is engaged in the production of iron and steel. Under Section 3 of the
Limestone and Dolomite Mines Labour Welfare Fund Act, 1972, it is required to
pay a duty of excise at such rate not exceeding Rs.1 per metric tonne of
limestone extracted and used for the purposes as afore stated. That has been
put to challenge. It would therefore be essential to reproduce Section 3 which
is as follows:
"3.
With effect from such date as the Central Government may, by notification in
the Official Gazette, appoint, there shall be levied and collected as a Cess
for the purposes of this Act on so much of Limestone and Dolomites produced in
any mine.
(i) As
is sold or otherwise disposed of to the occupier of any factory; or (ii) as is
used by the owner of such mine for any purpose in connection with the manufacture
of cement, iron, steel, ferro-alloys, alloy steel, chemicals, sugar, paper,
fertilizers, refractories Iron Ore pelletisation or such other article or goods
or class of articles or goods, as the Central Government, may, from time to
time, specify by notification in the official Gazette, a duty of excise, at
such rate not exceeding one rupee per metric tonne of Limestone or Dolomite, as
the cess may be, as the Central Government may from time to time, fix by
notification in the official Gazette.
EXPLANATION: Where the owner of any Limestone or
Dolomite Mine is also the occupier of any factory, then, for the purposes of
clause (ii), all Limestone or the Dolomite, as the case may be, produced in the
mine and not sold or otherwise disposed of to the occupier of any other factory
shall be deemed, unless the contrary is proved, to have been used by such owner
for any purpose an connection with the manufacture of any article or goods
referred to in or specified under Clause (ii)." Attention engaged before the
High Court, as also here, is whether the above provision be construed narrowly
or widely. The High Court has taken the view that the expression used therein
"for any purpose in connection with the manufacture of ....iron,
steel...." is of wide amplitude and will embrace within its scope such
activities as have nexus with its activity of manufacture of iron and steel.
A
number of commodities/industries find covered in sub- section (ii) of Section 3
and in almost all of them (leaving apart cement and chemicals) the use of
limestone per se is not directly towards their manufacture. If it is ruled that
no limestone is required for the manufacture of iron and steel in the context
of sub-section (ii) of Section 3, such narrow reading would lead to the
provision being rendered otiose, It has to be borne in mind that the primary
purpose of the Act is to build a Labour Welfare Fund, a measure well deserved
for the Labour, and the excise duty imposed is in the nature of a cess to
achieve that purpose. So the provision by its own compulsion requires to be
construed widely as otherwise the purpose of legislation would be frustrated.
Therefore limestone used by an owner extracted from his mine, for any purpose
relatable to and in connection with the manufacture of commodities, including
iron and steel, would attract payment of excise duty at the rates specified
therein. Such interpretation would only be the purposive one and commended by
the language employed. We therefore hold accordingly.
For
the foregoing reasons, agreeing with the views expressed by the High Court as
to the interpretation of the provision, we dismiss this appeal but without any
order as to costs.
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