21 August 1996
Supreme Court
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HINDUSTAN STEELWORKS CONSTRUCTION LTD. Vs LIMESTONE AND DOLOMITE MINESWELFARE AND CESS COMMISSIONER &

Bench: PUNCHHI,M.M.
Case number: Appeal (civil) 2725 of 1986


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PETITIONER: HINDUSTAN STEELWORKS CONSTRUCTION LTD.

       Vs.

RESPONDENT: LIMESTONE AND DOLOMITE MINESWELFARE AND CESS COMMISSIONER &

DATE OF JUDGMENT:       21/08/1996

BENCH: PUNCHHI, M.M. BENCH: PUNCHHI, M.M. MANOHAR SUJATA V. (J)

CITATION:  JT 1996 (7)   466        1996 SCALE  (6)130

ACT:

HEADNOTE:

JUDGMENT:                 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

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    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

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to costs.