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PETITIONER: M/S. HINDUSTAN PETROLEUM CORPORATION LTD.

       Vs.

RESPONDENT: THE COLLECTOR OF CENTRAL EXCISE

DATE OF JUDGMENT27/04/1995

BENCH: MAJMUDAR S.B. (J) BENCH: MAJMUDAR S.B. (J) SAHAI, R.M. (J)

CITATION:  1995 SCC  Supl.  (3)  45 JT 1995 (4)    88  1995 SCALE  (3)1

ACT:

HEADNOTE:

JUDGMENT: MAJMUDAR, J.: 1.   This group of civil appeals moved by the same appellant M/s.  Hindustan Petroleum Corporation Limited under  Section 35(A) of the Central Excises and Salt Act, 1944 (hereinafter referred  to as ’the Act’), against the Union of  India  and the concerned authorities raise a common question of law for our consideration.  That question is to the following effect ’whether the appellant who exported the concerned  excisable goods  as  ship’s stores for consumption  on  board  vessels bound for any foreign ports has to pay on these goods excise duty  as per Rule 13 of the Central Excise Rules or  whether the  appellant’s goods are liable to pay excise duty as  per Rule 12 of these Rules’. 2.   A  few  relevant introductory facts  leading  to  these appeals are required to be noted at the outset, 1.   Facts  leading  to Civil Appeal Nos. 2855 and  2856  of 1985 3.   The  appellants filed a refund claim for a sum  of  Rs. 18,859.50p  being the duty paid by them on Light Diesel  Oil (LDO)  supplied  as ship’s stores for foreign  going  ships. The  supplies were made on seven different occasions  during the period from 15.2.77 to 20.4.78. The LDO so supplied  was charged  to  basic excise duty, that is,  the  duty  payable under   the  First  Schedule  to  the  Act  read  with   any notification  in  force  at Rs.36.21 per kilo  litre  at  15 centigrade in terms of Central Excise Notification No.349/77 dated 16.12.77. The refund 93 claim was made with respect to Rule 13 of the rules.  It  is the  case  of  the appellants that no  duty  whatsoever  was payable  in  respect of LDO and Furnace  Oil  supplied  from bonded stock as ship’s stores going to foreign countries  in terms  of Central Excise Rule 13.  That they  are  therefore entitled to refund of excise duty paid on these goods. 4.   After  holding adjudication proceedings  the  Assistant

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Collector  rejected the claim.  According to  the  Assistant Collector  in the light of various notifications  issued  in connection  with  Rule  12  in  respect  of  such  supplies, additional excise duty was payable at the concessional rates in terms of Notification No.232/67 dated 9.10.67. In  short, the claim for refund was adjudicated in the light of Rule 12 and not under Rule 13. 5.   Aggrieved by this order the appellants went in  appeal. The Appellate Collector turned down the claim of the  appel- lants  that  the  case  was  governed  by  Rule  13  without reference  to Rule 12.  The appellants’ claim for refund  in connection with another item, namely, furnace oil also  came to  be  rejected by the Assistant Collector and  the  appeal regarding  the  same  was also dismissed  by  the  appellate authority.  Under these circumstances, the appellants  moved two further appeals before the Customs, Excise & Gold  (Con- trol) Tribunal (hereinafter referred to as ’the  Tribunal’). The  Tribunal  by its common order dismissed  these  appeals following  the  Delhi High Court’s judgment in the  case  of Hindustan  Aluminium Corporation Lid. v.  Superintendent  of Central Excise, Mirzapur and Ors. (1981 - ELT 642).  Against this  judgment of the Tribunal the present two  appeals  are moved. II.  Facts leading to Civil Appeal Nos.5396 -5398/85: 6.   The appellants during the period 7.2.78 to       4.5.78 exported Light Diesel Oil (LDO) and Furnace Oil.   According to  the appellants as per Rule 13 of the rules, no duty  was payable  on  these  exports.  By  an  order  dated  4.10.78, Superintendent  of  Central  Excise,  Calcutta  11  Division raised  the  demand for duty and therefore,  the  appellants paid the duty under protest.  Thereafter, on 18th May,  1978 the  appellants  claimed  refund  of  the  duty  paid  under protest.   By orders dated 1.9.78 and 7.9.78, the  Assistant Collector rejected the refund claim of the appellants.   The appellants preferred appeals before the Appellate  Collector who allowed the appeals by order dated 17.3.81 and held that the  refund  claims were admissible as per Rule  13  of  the rules. 7.   A  show  cause notice was issued by the  Government  of India  on 11th September, 1981 as per Section 36(2)  of  the Act calling upon the appellants to show cause as to why  the order  of the Appellate Collector should not be  set  aside. The  appellants  gave  reply to the  show  cause  notice  on 14.10.81.  Thereafter, the proceedings were  transferred  to the Tribunal.  The Tribunal by its common order dated 2.5.85 disposed  of  the review proceedings by  setting  aside  the order of the Appellate Collector and restoring the order  of the  Assistant Collector.  That is how the  present  appeals are  filed  by  the  appellants against  the  order  of  the Tribunal dated 2.5.85. Ill.  Facts leading to Civil Appeal Nos.971-72/ 86: 8.   The appellants supplied Light Die- 94 sel Oil (LDO) and furnace oil during the period 26.12.77  to 22.8.78 from their bonded tanks in bunkers to foreign  going vessels.  According to the appellants the said export of the aforesaid  oil  was  covered by Rule 13 of  the  rules.   On 29.4.78  the appellants paid the duty under protest  because of  the  demand  of  the  Superintendent,  Central   Excise, Calcutta 11 Division.  Thereafter, on 5.4.79 the  appellants preferred  refund  claims for the duty paid  under  protest. The  Assistant  Collector  of Central  Excise,  Calcutta  II Division  by order dated 8.9.90 rejected the refund  claims. The appellants preferred two appeals being Nos. 1524 &  1525 of  198 1, against the adjudication order of  the  Assistant

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Collector   to  the  Appellate  Collector.   The   Appellate Collector  by order dated 6.11.81 allowed the claim  of  the appellants.   The Appellate Collector held that  the  refund claims were admissible as per Rule 13 of the rules.  On 27th August, 1982, respondent no. 1, Govt. of India issued a show cause notice under Section 36(2) of the Act calling upon the appellants to show cause why the order of the Appellate Col- lector should not be set aside.  The appellants filed  their reply to the show cause notice on 29th September, 1982.  The said  proceedings were transferred to the Tribunal and  were registered  as  Appeal  No.ED(SB)(T)  1470/82-C.   The  said appeal was allowed by the Tribunal on 19.2.85. The order  of the  Appellate Collector was set aside and the order of  the Assistant   Collector  was  restored.   That  is   how   the appellants  preferred these appeals under Section  35(2)  of the Act against the said decision of the Tribunal. IV. Facts leading to Civil Appeal Nos.417696/86 9.     The appellants supplied Aviation Turbine  Fuel  (ATF) during the period from 1. 1.78 to 30.6.81 from bonded  stock to  foreign bound aircraft from the Palam depot.  The  above said  supplies  were  made  under Rule  13  of  the  rules’. According  to the appellants no excise duty was  payable  on these goods.  However, the duty was paid under protest.  The appellants  filed twenty-one claims for refund of duty  paid during  that  period.  The Assistant  Collector  of  Central Excise,   MOD-1,   New  Delhi  by  separate   orders   dated 17.10.84/18.1.84 rejected the refund claims.  The appellants preferred  appeals before the Appellate  Collector,  Central Excise, New Delhi during the period from 1979 and 1982.  The appellants’   twenty-one  appeals  against   the   Assistant Collector’s  orders  were also dismissed  by  the  Appellate Collector  by  orders  dated 23.7.84 and  21.8.84.  The  ap- pellants  preferred  21 revision  applications  against  the Appellate  Collector’s orders.  The Govt. of India  rejected these  revision applications on 19.3.85 and that is why  the appellants  preferred  Special Leave Petitions  against  the impugned  judgment and order of the Tribunal in twenty-  one revision applications.  Having been granted leave to  appeal under  Article 136 of the Constitution by this Court,  these appeals are registered as civil appeals. 10.Mr.  Soli J. Sorabjee, learned counsel appearing for  the appellants, vehemently contended that the appellants are not liable  to  pay  excise duty on  goods  which  are  exported outside India from a warehouse or registered factory.   That as per Rule 13 of the rules such export can be made  without payment  of duty on the goods directly exported from  bonded warehouse   or   registered  factory.   That  Rule   13   is independent of Rule 12 which deals with only rebate of  duty on excise duty paid 95 goods  which are subsequently exported outside India.   That in  all these cases, therefore, the duty paid under  protest by  the  appellants  was  liable to  be  refunded.   It  was submitted  by Shri Sorabjee, learned senior counsel for  the appellants,  that  in the case of Indian  Aluminium  Company Limited  v. Union of India (1988 (36) E.L.T. 435)  the  High Court  of  Calcutta  has  taken the view  that  Rule  13  is independent  of Rule 12 and a manufacturer exporter who  has followed the provisions of Rule 13 was not liable to pay any duty  on  such goods and that the decision to  the  contrary rendered  by Delhi High Court was rightly dissented from  by the Calcutta High Court.  In short, placing reliance on  the said  decision it was submitted that the appeals  should  be allowed.   The learned standing counsel for revenue, on  the other  hand contended that the view propounded by the  Delhi

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High  Court  in  Hindustan  Aluminium  Corporation  Ltd.  v. Superintendent of Central Excise, Mirzapur and Ors.  (supra) is a correct view and the decision rendered by Calcutta High Court does not lay down correct law.  That the Tribunal  was Justified  in rejecting all these claims of  the  appellants following the decision of the Delhi High Court. 11.In view of these rival contentions, it becomes clear that the  fate  of  these proceedings hinges  round  the  correct interpretation of Rules 12 and 13 of the rules.  These rules are  part and parcel of the Central Excise Rules, 1944  made by  the  Central  Government  in  exercise  of  its   powers conferred  by  Section  36(2)  of  the  Act.   It  will   be appropriate to reproduce Rules 12 and 13 as they existed  on the statute book at the material time for resolving the con- troversy between the parties.               "Rule 12.  Rebate of duty on goods exported, -               (1)  The Central Government may, from time  to               time, by notification in the Official Gazette,               grant rebate of duty paid on excisable  goods,               if exported outside India, to such extent, and               subject  to  such safeguards,  conditions  and               limitations  as  regards the class  of  goods,               destination, mode of transport, and other  al-               lied matters as may be specified therein.               Provided  that if the Collector  is  satisfied               that the goods have in fact been exported,  he               may,  for reasons to be recorded  in  writing,               allow  the whole or any part of the claim  for               such  rebate  even  if  all  or  any  of   the               conditions  laid  down  in  any   notification               issued under this rule have not been  complied               with.               Explanation.  - For the purposes of this  rule               the term "Collector" includes the Collector of               Central Excise at Madras, Bombay, Calcutta and               Cochin and the Collector of Central Excise  in               whose territorial jurisdiction the airport  or               port  of  Visakhapatnam,  Kakinada,               Jamnagar, Mangalore, Bhavnagar, Veraval,  Por-               bandar,    Rameswaram,   Tuticorin,    Kandla,               Cuddalore,Okha,  Nagapatinam, Pondicherry  and               Paradip is located.               (2)   Where  the Central Government  does  not               grant  under  sub-rule(1)  either  wholly   or               partially and rebate of duty paid on excisable               goods exported to a country outside India,  it               may,  in  order to promote exports  or  fulfil               obligations arising out of any treaty  entered               into between India and the Government of  that               country provide for payment to the  Government               of  that country an amount not  exceeding  the               duty  of excise paid on such goods  which  are               exported out of India to that country.               13.   Export wider bond of goods on which duty               has  not been paid. - Goods other  than  salt,               vegetable non-essential oils, and               96               tea  all  varieties except package  tea  under               T.C.(2) made from duty paid loose tea, may  in               like  manner  be exported without  payment  of               duty  from a warehouse or a licensed  factory,               provided  that  export is made  in  accordance               with  the  procedure set out in  the  relevant               provisions  of Chapter IX of these  Rules  and               the  owner  enters into a bond in  the  proper

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             Form, with such surety or sufficient security,               and under such conditions as the Collector ap-               proves,  in a sum equal at least to  the  duty               chargeable  on the goods, for the due  arrival               thereof  at  the  place of  export  and  their               export  therefrom  wider  Customs  or   Postal               supervision  as  the case may be,  within  the               period  prescribed  for goods  exported  under               Rule 12; and such bond shall not be discharged               unless  -the  goods  are  duly  exported,   to               satisfaction of the Collector, within the time               allowed  for  such export,  or  are  otherwise               accounted  for  to the  satisfaction  of  such               officer; nor untill the full duty due upon any               deficiency of goods, not so accounted for, has               been paid.               Explanation. - For the purpose of this rule as               well  as  rule 14, 14A and 14B, (i)  the  term               "Collector" includes the Collectors of Central               Excise at Bombay, Madras and Calcutta and (ii)               the term ’goods’ includes excisable goods used               in  the  manufacture of the  goods  which  are               exported." 12.  A  mere look at Rule 12 shows that it will cover  those excisable goods which have already been subjected to payment of  excise duty but which are subsequently exported  outside India.   On proof of fulfilment of conditions laid  down  by Rule  12, the concerned exporter of such goods will be  able to  get rebate as per the terms and conditions laid down  by the notification issued by Central Govt. under sub-rule  (1) of Rule 12.  So far as Rule 13 is concerned, other excisable goods  mentioned in the rule may in the like manner  meaning thereby  as prescribed by Rule 12, can be  exported  without payment of duty from warehouse or licensed factory, provided that export is made in accordance with the procedure set out in the relevant provisions of Chapter IX of these Rules  and the  owner enters into a bond in the proper form, with  such surety  or sufficient security under such conditions in  the sum  equivalent to that chargeable on the goods for the  due arrival at the port of the export.  And such bond shall  not be  discharged  unless the goods are duly  exported  to  the satisfaction of the Collector.  It therefore, appears  clear that  Rules  12 and 13 deal with excisable goods  which  are exported  from the country of their manufacture  to  outside countries.   If  the  excisable  goods  are  exported  after payment of duty they may cam refund as per notification laid down  by Rule 12.  While if these excisable goods are  found in  bonded warehouse covered by bond to pay  excisable  duty payable  thereon, in case they are exported as laid down  by Rule  13 they may cam exemption from payment of duty in  the same manner as laid down by Rule 12.  Therefore, both  these rules  are  complementary to each other and cover  the  same topic  of  payment of appropriate excise duty  on  excisable goods which arc exported outside India.  In case of Rule  12 the duty is to be paid first and on satisfying the condition of  notification and proof of export appropriate refund  can be  earned in the light of the notification.  While in  case of  Rule 13 no duty shall be paid in the first instance  and on  proof of export as laid down by Rule 13 the  respondents cannot demand any duty on those goods, in excess of what  is permissible.  But if the proof of export is not available as required by Rule 13, full duty will have to be paid on these goods.   However,  so far as liability to  pay  excise  duty under Rule 13 is concerned, 97

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it will have to be linked up with Rule 12, because that rule deals   with  rebate  of  duty  paid  on   excisable   goods manufactured  in India which have ultimately  been  exported outside  India.  It is also pertinent to note that even  for applicability  of Rule 13 the excisable goods stored in  the bonded  warehouse  have to be exported in  the  like  manner meaning thereby under similar circumstances as mentioned  in Rule  12  which is immediately preceding Rule 13  and  which deals  with similar special concessional payment of duty  on excisable   goods  manufactured  in  India  and  which   are ultimately exported and which bring foreign exchange to  the country.   It  is not as if under Rule  13  excisable  goods which are subjected to export directly from the warehouse of licensed  factory  do not incur any excise  duty.   That  is contra  indicated  by  the requirement  of  Rule  13  itself calling  upon the exporter to enter into a bond for  payment of requisite full duty in case the situation arises for  the same  and  that  bond  is  not  to  be  discharged  and  the obligation under the bond has to continue for the benefit of revenue  till  proof  of export is  made  available  to  the satisfaction  of the Collector.  The appellants’  contention that Rule 13 is independent of Rule 12, therefore, cannot be accepted. 13. This very view was taken by the Delhi High Court in  the case  of  Hindustan Aluminium Corporation Lid.  v.  Superin- tendent of Excise, Mirzapur and Ors. (supra).  An  identical question  was  posed  for consideration of  the  Delhi  High Court.   It was answered by the Division Bench of the  Delhi High Court speaking through Sachar, J. The Delhi High  Court held that the quantum of duty or rebate has to be determined in  the  light  of the notification issued  under  Rule  12. Under  Rule  13 without first payment of duty goods  can  be exported  but  that  does not mean that the  goods  are  not liable  to pay duty.  Since Rule 13 contemplates release  of goods  under bond the petitioner can claim  postponement  of payment of duty but cannot claim total exemption.  Referring to Rule 9 and Rule 140 of the rules it was held that  though Rule  9  provided that no excisable goods shall  be  removed from  where they are manufactured without payment  of  duty, Rule  13 allows such removal for export without  payment  of duty.  Rule 140 empowers the Collector to approve a  private warehouse  for storage of excisable goods on which duty  has not  been  paid and also empowers that he  may  require  the licensed warehouse holder to execute bond to pay the duty on goods  when necessary.  Reliance was also placed on Rule  47 which  enables  the manufacturer to provide  store  room  or other place of storage at his premises for depositing  goods manufactured  on the same premises without payment of  duty. Such  store  room  or  place  has  to  be  approved  by  the Collector.   Of course, in such a case the manufacturer  has to  enter into a bond for payment as mentioned in  Rule  48. Referring  to Rule 13 it was observed that as per  the  said rule  goods can be exported without payment of duty  from  a warehouse  or a licensed factory, provided the owner  enters into  a bond as contemplated therein.  It is  possible  both for the manufacturer or any other owner to enter into a bond under  Rule 13.  Even under Rule 140 the warehouse to  which goods  may  be  removed without payment  of  duty,  may  not necessarily  belong to the manufacturer.  Reliance was  also placed on the provision of Rule 13 to the effect that  goods without  payment  of  duty  can  be  exported  as  per   the provisions  of Chapter IX of the rules which  would  include Rule 185. 98 Therefore,  the conditions laid down by notification  issued

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on 17.5.69 under Rule 12 will automatically be applicable to goods exported under Rule 13.  It was also observed that  it was  not  as if goods exported under Rule 13  were  exempted from  payment of excise duty.  In para 14 of the  report  it was  observed that the facility of removing without  payment of  duty cannot be equated with a substantive right  of  ex- emption  from payment of duty as was the contention  of  Mr. Sorabjee.   Rule  8  empowers  the  Central  Government   by notification  in the Official Gazette to exempt  subject  to such  conditions  as may be specified  in  the  notification excisable goods from the whole or any part of duty  leviable thereon.   It was not the case of the appellants that  there was any notification issued exempting the goods exported un- der a bond under Rule 13 from payment of duty. 14.  Repelling the arguments of the learned counsel for  the petitioner  that  reference  in Rule  13  to  the  provision regarding the goods being exported in the like manner refers to only the procedure for export as contemplated by Rule  12 and  had  nothing  to do with the  rate  of  excisable  duty prescribed  under notification issued under Rule 12, it  was observed  that  procedure  for  exporting  such  goods.  was already  laid  down by Chapter IX of the rules  and  it  was expressly  mentioned in Rule 13.  Therefore the phrase  ’may in  the like manner be exported’ as found in Rule 13  has  a clear linkage with the liability to pay duty as laid down by Rule  12  and accordingly the contention of  the  appellants before the Delhi High Court that Rule 13 was independent  of Rule  12  was rejected and it was held that even  goods  ex- ported from bonded warehouse under Rule 13 under a bond will have  to bear duty to the extent indicated  by  notification issued under Rule 12 as applicable at the relevant time. 15.  In our view the aforesaid decision of Delhi High  Court correctly  laid  down the scheme of Rules 12 and 13  in  the light  of  other  relevant rules holding the  field  at  the relevant time.  All that Rule 13 provides for is a  facility given  to the concerned manufacturer of excisable  goods  of not  paying  excise duty when such goods are  taken  out  of bonded  warehouse  or  licensed factory under  a  bond  duly executed  under Rule 13 which defers payment of excise  duty but  at the same time guarantees to the revenue  payment  of full  excise  duty thereon if they arc  not  ultimately  ex- ported.   Thus  the liability to pay excise  duty  does  not vanish  and  the  goods do not become  totally  exempt  from payment  of excise duty as the charge of the  duty  attaches moment they are manufactured as laid down by the Act.   When we  turn  to Chapter IX of the rules we find that  it  deals with  export  under rebate of duty or under  bond.   Thus  a common  procedure has been provided under Chapter  IX,  both for  the  claim  for rebate of duty on export  of  goods  as envisaged by Rule 12 and also under bond executed under Rule 13  in  connection with export of excisable goods.   As  per rule 13 exporter of excise goods on which duty had not  been paid has also to follow the same procedure under Chapter  IX as  has to be followed for exports under Rule 12.   Thus  an exporter of excisable goods on which duty is not paid in the first  instance  but which are covered under the  bond  duly executed in favour of the revenue by the owner of the  goods has  also  to  follow the procedure of  Rule  185  found  in Chapter IX.  All that Rule 13 99 therefore  seeks to do is that it provides for the  facility of  deferred  payment of excise duty and what  will  be  the extent  of duty ultimately payable on such goods covered  by bond  executed  under  Rule 13 will have  to  be  determined independently  of  Rule 13 and that is the  reason  why  the

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liability to pay excise on such goods has to be  ascertained before discharging the liability under the bond and for that purpose  linkage  with Rule 12 become relevant  as  per  the phrase "may in the like manner be exported" as found in Rule 13.  If Rules 12 & 13 arc not read in conjunction with  each other  an  anomalous  and also  discriminatory  result  will follow.   This  can  be  demonstrated  by  taking  a  simple example. 16.  If  an  excisable  commodity  like  Sewing  Machine  is exported from a bonded warehouse under Rule 13 under a  bond it  may  not have to bear excise duty till it  is  exported. But if the same commodity namely, sewing machine is  cleared ex-factory   gate  on  payment  of  full  excise  duty   and thereafter  it  is  exported  and if  it  is  covered  by  a notification  under  Rule 12(1) granting  rebate  then  only because  the  same commodity is first cleared  from  factory gate on payment of full duty, it will have to bear a reduced excise duty as per the notification on proof of export while the same commodity if placed in a bonded warehouse and  then exported  may  get totally exempted from duty.  If  say  for such  a  sewing  machine  the excise duty  is  Rs.  100  per machine,  and  on  proof of export if 20% rebate  is  to  be available then proof of export of such machine after payment of  Rs.100  excise duty would entitle the  exporter  to  get refund of Rs.20 and such machine may have to bear the excise duty  of  Rs.80.  While if the  same  sewing  machine  which otherwise is liable to pay Rs. 100 excise duty is placed  in a  bonded  warehouse by availing the  facility  of  deferred payment of duty under bond as per Rule 13 and if Rule 13  is to  be read independently of Rule 12, then export of such  a machine from bonded warehouse would entitle the exporter  to claim full exemption of Rs.  100 by way of duty on the  same machine.  Thus a person who first pays excise duty and  then exports  the  commodity would pay Rs.80 by  way  of  reduced duty, while a person who enjoys the facility of  non-payment of duty at the stage of taking out the commodity from bonded warehouse  and getting it exported would enjoy on  the  same commodity  total  exemption from duty when it  is  otherwise liable to bear the same rate of excise duty.  Such a  result would  be  discriminatory and arbitrary.  To avoid  such  an anomalous result Rule 13 will have to be read in conjunction with Rule 12 and as complementary to Rule 12. If Rule 13  is read  independently  of  Rule  12  as  contended  by  senior standing  counsel for appellants, Sh.  Sorabjee an  exporter of  such a sewing machine who is prompt in paying full  duty of  Rs. 100/- and then exports it will have to suffer as  he will have to pay Rs.80/- as duty ultimately but one who does not  pay duty shall in the first instance  after  satisfying conditions  of  Rule  13 will pay nil duty.   It  would  put premium  on  non-  payment of duty and  result  in  treating equals  inequally.   On the other hand an  equitable  result would follow if Rules 12 and 13 are read as complementary to each  other  dealing  as they do with the  same  subject  of remission  of  duty  on export of excisable  goods.   It  is obvious  that interpretation of these rules must be made  in such  a manner as to avoid inequitable result and to  ensure an equitable result.  According to us the view taken by  the Delhi High Court is quite justified and 100 unexceptionable as it avoids such an inequitable result.  On the  contrary, the view expressed by Calcutta High Court  in the  -case of Indian Aluminium Company Limited v.  Union  of India  (supra)  wherein  it is held that Rule 13  is  to  be applied independently of Rule 12, would obviously result  in the  aforesaid  inequitable consequences which  can  not  be

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countenanced, Turning to the Division Bench judgment of  the Calcutta  High Court, we find that the Calcutta  High  Court has  placed  emphasis  on the words  used  in  these  rules, namely, "rebate on duty of excise paid" as found in Rule  12 as  contra distinguished from the words used in Rule  13  to the effect "export under bond of commodities on which duties have  not been paid".  In our view if the common  scheme  of both  these rules is appreciated in its proper  perspective, mere  difference  of phraseology contained  in  these  rules regarding the time and mode of payment of excise duty  would pale  into  insignificance.   It  is  true  as  observed  by Calcutta  High Court that Rule 12 talks of  a  notification, while Rule 13 does not refer to any notification.  But once, it  is kept in view that the burden of duty which has to  be borne  by  the concerned commodity, whether it  is  exported from  a bonded warehouse or from open market has to  be  the same  to  avoid any inequitable result,  the  difference  in phraseology  employed by these rules cannot have any  impact on the true construction of these rules.  This should be for the  simple reason that ultimately the exact burden  of  the excise  duty to be borne by an exported commodity will  have to  be  governed by the notification issued under  Rule  12. Equally unjustified is the reasoning adopted by the Calcutta High Court in para 14 of the report that as per Rule 13  the export   is  made  from  bonded  warehouse   and   therefore manufacturer  may not cam profit which he may cam  if  first the  goods  are cleared on payment of excise duty  and  then they arc exported.  In our view this distinction is  without any real difference.  It has to be kept in view that if  the excisable  goods are first cleared for home consumption  and then  exported  within the time prescribed  under  Rule  12, refund  would be claimed by the exporter who may not be  the manufacturer of such commodity.  Such a manufacturer when he sells  the goods for home consumption may get profit out  of the transaction but ultimately the burden of the excise duty paid  by him on the cleared commodity will be passed  on  to the  purchaser  and  such  a purchaser  if  he  exports  the commodity  within the time limit prescribed by Rule  12  can claim  refund of duty paid to the extent  permissible  under the  notification  issued  under Rule  12.   Therefore,  the benefit of such exporter is only to the extent of the lessor duty  which he ultimately pays while in case of Rule  13  If the manufacturer directly exports the commodity he  directly gets  the benefit which he will have no occasion to pass  on to  the  foreign imported buyer.  He will  load  the  export price  to  the  extent  of the  duty  which  ultimately  the exported commodity is to bear.  In either case the burden of duty borne by the exporter under Rule 13 or the manufacturer of  goods  cleared for home consumption would be nil  as  he would pass on the burden to the foreign importer under  Rule 13  or to the purchaser for home consumption under  Rule  12 who  may  cam in his turn rebate on duty paid if  goods  are exported as per Rule 12.  Thus the duty of excise will  have no  real  impact  on  the extent of  profit  earned  by  the manufacturer  on  goods cleared for home consumption  or  on goods exported.  Profit on such goods will be the 101 difference  between market price in home or  foreign  market and  the cost price.  In home market the margin may be  less as excise duty will form part of cost.  In foreign market it may  be  more if goods are exported under  Rule  13  without payment of duty.  Consequently, it is not possible to  agree with the view of the Calcutta High Court that because  under Rule  12  the manufacturer earns more profit by  selling  in local  market for home consumption, the exporter under  Rule

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12  may bear a larger burden of excise duty as  compared  to the  exporter, manufacturer of the same type of goods  under Rule  13.  Similarly, it is not possible to  appreciate  the reasoning  adopted by the Calcutta High Court in para 28  of the  report to the effect that under Rule 13 what is  sought to  be  secured is the proper exportation of goods  and  not duty to be borne by the exporter.  It has to be kept in view that  excise duties have nothing to do with the  exports  as such  or with the charging of custom duty on  export.   They are  only  concerned with charging and  recovery  of  excise duties  which are attached to the manufacture of  the  goods and  their  clearance either for borne  consumption  or  for export  as the case may be. The Calcutta High Court is  also in  error  in taking the view that the words  "in  the  like manner  be  exported"  as found in Rule  13  deal  with  the procedure  for export, as the procedure is already  provided in the same rule by making an express provision that such an export  will be made in accordance with the  procedure  laid down  in  Chapter  IX of  these  rules.   Consequently,  the meaning  assigned to the phrase, "may in the like manner  be exported"  by  the Calcutta High Court as found in  Rule  13 would on the reasoning of the High Court become tantologous. It  must therefore be held that when the rule 13  refers  to the  export  to  be  made  in  the  like  manner,  it  would necessarily mean subject to the same conditions and require- ments as laid down by the preceding Rule 12 which refers  to the same topic, namely, export of excisable commodities  and excise  duty  payable on them whether  the  manufacturer  of articles  has exported them after payment of duty or  before payment  of duty would make no difference on these  aspects. The  Calcutta High Court has found fault with the  reasoning of  the Delhi High Court in Hindustan Aluminium  Corporation Limited v. Superintendent, Central Excise (supra) by  taking the view that the Delhi High Court had wrongly assumed  that the  exported goods are not exempted from payment of  excise duty  under Rule 8 and that the provisions of Section 37  of the Act were overlooked by the High Court.  Now it cannot be gainsaid  that no exemption notification covering the  goods in question is issued under Rule 8. So far as Section 37  is concerned,  all that it provides is that the  Central  Govt. may make rules for providing exemption in whole or part from duties  imposed  by  the Act.  In  this  connection,  it  is necessary to note that the Central Excise rules are made  by the  Central Govt. in exercise of its powers  under  Section 37.  Rule 8 relating to exemption is also a part and  parcel of  these rules and it has a linkage with Section 37 of  the rules.  Rule 13 has nothing to do with exemption as  wrongly assumed by the Calcutta High Court.  If Rule 13 was  dealing with  total  exemption  from  payment  of  excise  duty   on excisable goods exported from bonded warehouse, there  would have  been  no occasion for the rule  making  authority  for providing  execution of bonds for covering the  entire  duty payable on such excisable goods.  Even apart from all  these reasons, it is obvious that the con- 102 clusion  to which the Calcutta High Court reached that  Rule 12  is independent of Rule 13 would result in  an  anomalous and  discriminatory situation as already  discussed  earlier such  an interpretation cannot be countenanced on the  touch stone  of Article 14 of the Constitution of India.  It  must there  be  held  that the decision of  Calcutta  High  Court cannot  be  treated to be laying down correct law.   On  the contrary  as  seen earlier the decision of  the  Delhi  High Court   in   Hindustan   Aluminium   Corporation   Lid.   v. Superintendent,  Central  Excise has  correctly  interpreted

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Rules  12  and  13.  The Tribunal  was  therefore  right  in following  the ’decision of Delhi High Court and  coming  to its  conclusion in that light.  In the result these  appeals fail  and are dismissed.  In the facts and circumstances  of the case there will be no order as to costs. 106