HINDUSTAN STEELWORKS CONSTRUCTION LTD.versusLIMESTONE AND DOLOMITE MINES WELFARE AND CESS COMMISSIONER AND ANR.

              HINDUSTAN STEELWORKS CONSTRUCTION LTD.                                A
                                          v.
      LIMESTONE AND DOLOMITE MINES WELFARE AND CESS
                  COMMISSIONER AND ANR.

                                AUGUST 21, 1996
                                                                                    B
              [M.M. PUNCHHI AND SUJATA V. MANOHAR, JJ.]

            Limestone and Dolomite Mines Labour Welfare Fu11d Act, 1972 :

           Sectioll J-Expression ''for any purpose ill co1l11ectioll with manufacture C
    of [roll, Steel''-!nterpretatioll of-Compa11y owning milles-Extractillg lime-
    stone alld using it ill the constniction work for expansion of plant engaged in
    production of iroll alld steel-Levy of excise duty imposed ill the nature of a
    cesS-Challenge to levy-Held limestolle used by an owller extracted from his
    mine, for any purpose re/arable to alld in COllllection with the mallufacture of
    commodities, includillg iron and steel, attracts payment of excise duty at the D
    specified rates-Purpose of the Act explained-Held provisiolls of the Act
    should be const1ued widely.

            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2725 of
    1986.
                                                                                    E
         From the Judgment and Order dated 27.9.85 of the Madhya Pradesh
    High Court in M.P. No. 71 of 1982.

            Dr. Sankar Ghosh and P.P. Singh, for the Appellant.
•
            W.A. Qadri for C.V.S. Rao for the Respondents.                           F

            The following Order of the Court was delivered :

          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 appellannhat it is using such G
    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 H
                                         831
    832                     SUPREME COURT REPORTS (1996] SUPP. 4 S.C.R.

A 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 su.ch date as the Central Government may, by
             notification in the Official Gazette, appoint, there shall be levied
             and collecte~ as a Cess for the purposes of this Act on so much
B            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
c             connection with the manufacture of cement, iron, steel, ferro-al-
              loys, 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
D             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
E
              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 or any other factory shall be deemed unless the
              contrary is proved, to have been used by such owner for any
              purpose in connection with the manufacture of any article or goods           •
F             referred to in or specified under Clause (ii)."

           Attention engaged before the High Court, as also here, is whether
     the above pro,ision be construed narrowly or widely. The High Court has
     taken the view that the expression used therein "for any purpose in con-
G    nection 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)
H    the use of limestone per se is not directly towards their manufacture. If it




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   HINDUSTAN S'IEELWORKS CONS. v. LIMESTONE& DOLOMITE MINES WELFARE& CESS COMMR. 833


is ruled that no limestone is required for the manufacture of iron and steel           A
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              B
compulsion requires to be construed widely as otherwise the purpose of
legislation would be frustrated. Therefore limestone use 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 inter-
pretation would only be the purposive one and commended by the Ian-                    C
guage 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.
                                                                                       D
T.N.A.                                                         Appeal dismissed.