Holding

The term 'coated paper' in the proviso refers only to coated paper used for industrial purposes and not to coated varieties of printing and writing paper.

Summary

Rohit Pulp and Paper Mills Ltd., a small-scale manufacturer using waste paper and cereal straw, sought the concessional excise rates under Notification No. 25 of 1984, which excluded "coated paper (including waxed paper)" from the benefit. The factory produced art paper and chromo paper, both coated varieties used for printing and writing. The Excise Department and the CEQAT denied the concession, interpreting "coated paper" broadly to include all coated papers. The appellant argued that, in the context of the proviso, "coated paper" should be read narrowly to mean only coated paper used for industrial purposes, invoking the noscitur a sociis principle. The Supreme Court held that the term indeed refers only to industrial‑purpose coated paper, thereby excluding art and chromo paper from the exclusion and granting the appellant the concessional rates. The appeal was allowed.

Issues considered

Whether the expression 'coated paper' in the second proviso of Notification No. 25 of 1984 should be interpreted narrowly to refer only to industrial‑purpose coated paper.
Whether the exclusion of 'coated paper' from the concession applies to art paper and chromo paper, which are coated printing and writing papers.
Whether the principle of noscitur a sociis/ejusdem generis can be applied to limit the scope of the statutory term.

Legislation cited

Central Excise Rules, 1944s. Rule 8(1)
Central Excises and Salt Act, 1944s. 35C, s. 4

Subjects

Central ExciseStatutory interpretationCoated paperNoscitur a sociisEjusdem generisConcessional ratesIndustrial paperCultural paperTax exemption

Judgment

ROHIT PULP AND PAPER MILLS LTD.
A

r'. - v.
COLLECTOR OF CENTRAL EXCISE, BARODA

APRIL 26, 1990

[S. RANGANATHAN AND A.M. AHMADI, JJ.] B

Central Excises And Salt Act, 1944/Central Excise Rules,
''1" 1944: Sections 4, 35C/First Schedule, Item 17, Rule 8( 1), and Notifica-
lion Nos. 24 of 1984. 25 of 1984 and Provisoes and 45 of 1985-Excise
Duty-Concessional rates on paper and paper board-Exception
clause-Interpretation of-Art paper, and chromo paper-Whether
entitled to exemption-Principle of noscitur a sociis-Applicability of.
c
Notifications No. 24 and 25 of 1984 under rule (1) of the Central
·~ Excise Rules, were issued on 1.3.1984 in respect of paper and paper
board falling_under item 17(1) of the first schedule to the Central Excises
and Salt Act, 1944. While notification No. 24 of 1984 restricted the D
excise duty on certain items, notification No. 25 of 1984 provided for a
concession in respect of paper and paper boards manufactured out of
pulp containing not less than 50 per cent by weight of pulp made from
materials (other than bamboo, hardwoods, softwoods, neds or rags)
and cleared on or after the 1st day of April in any financial year, subject
:/ to certain important conditions set out in the provisoes to the notifies-
tion. Under the provisoes, the concessional rates were applicable only if
E

the factory did not have plant attached to it for making bamboo, wood
pulp and the exemption would not apply to cigarette tissue, glassine
paper, grease proof paper, coated paper (including waxed paper) and
paper of a substance not exceeding 25 grammes per square metre.
).._ Another notification No. 45 of 1985 dated 17.3.1985 was also issued F
prescribing rates on paper and paper board falling under the aforesaid
I
item including coated paper.
+-
The appellant-assessee had a factory in which different varieties
of paper and paper board were being manufactured, using waste paper
and cereal straw containing more than 50 per cent by weight of pulp G
made from the unconventional raw materials. The factory did not have
a bamboo pulp plant .

.A.... The assessee was manufacturing art paper and chromo paper.
These two types of paper generally fell under category of printing and
writing paper. These two articles also fell under the description coated H

797
798 SUPREME COVRT REPORTS [1990] 2 S.C.R.

paper used in the second proviso to the notification No. 25 of 1984. The
A appellant initially paid excise duty on the goods manufactured by it in
terms of notification No. 24 of 1984, but later claimed concessional rates
prescribed by notification No. 25 of 1984. Since coated paper was taken
out of the purview of notification No. 25 of 1984, by the proviso, the
Excise Department refused to permit the assessee to avail of this conces-
B sion in respect of its manufactured goods. This was confirmed by the
Central Excise and Gold Control Appellate Tribunal.

In the appeal before this Court, on behalf of the appellant-
assessee it was contended that though the expression 'coated paper' had
generally a wide connotation and included coated papers of all varieties,
it should be given a restricted meaning in the context in which it
c appeared in the proviso, that in the paper business, paper was broadly
two varieties, "industrial paper" and "cultural paper", that wl!lle
paper used for printing or writing was treated as cultural paper
that used for various purposes, broadly described as industrial pur-
poses, such as wrapping, packing, sanitary use and the like_, was indust-
D rial paper, that since a common strain ran through all the five
categories mentioned in the proviso, inasmuch the fu-st three varieties,
admittedly fell under the category of industrial paper and the last one
was invariably used for industrial purposes, and so found by the Tri-
bunal, the word 'coated paper', must be read in that context, and
should be interpreted by applying the principle of "Noscitur A Sociis"
E or on the analogy of the "Ejusdem generis" principle and that even if
the words of the proviso were capable of being construed in a wider
manner so as to deny exemption to all kinds of coated paper, the Court
should apply the well-established principle of construction of taxing
statutes that an ambiguous provision should be interpreted in favour of
the subject.
F
On behalf of the respondent it was contended that there was no 1
principle of interpretation by which the plain and natural meaning of
the word 'coated paper' could be abridged nor was there anything in
the context to warram such a limitation, that there was no clear cut
distinction between industrial and cultural paper, and that it could not
G be said that light paper could only be industrial paper.

Allowing the appeals, this Court,

HELD: 1. 'Coated paper' in the second proviso to notification
No. 25 of 1984 refers only to coated paper used for industrial pur-
.
H poses and not to coated varieties of printing and writing paper. The
ROHJT PAPER MILLS v. C.C.E 799
" appellant is, therefore, entitled to concessional rates specified in the A

---'-
I notification. l812F-G]

2.1 The expression 'coated paper' in the proviso should draw
colour from the context in which it is employed and receive an interpre-
tation consistent therewith than its literal one, which in its widest sense, B
may be comprehensive enough to include all coated paper, industrial or
otherwise. [809G-Hj
·...,...-
2.2 The concession of the notification is denied to five kinds of
paper. Three of them are varieties of industrial paper. The fourth is
light paper, not exceeding a particular weight. Light paper is by and
_-f large industrial paper and is also used occasionally for cultural c
purposes also. The five varieties of paper are found in serial Nos. 3 and
4 of the 1985 notification and serial Nos. l and 3, reflect a contrast between
~/ coated paper and light paper used for cultural purposes (item No. l)
and that used for other (industrial) purposes (item No. 3). On this basis,
it is clear that four out of the five varieties of paper which are denied the
D
benefit of the concession constitute industrial paper. In fact, even
if, only three of these items are of the industrial variety, while .the
other two could be either, it will not still be unreasonably (though
may be, a little less plausible) to draw an inference that only indus-
trial paper falling in those two categories are intended to be com-
/ prehended in the classification rather than assume, for no detectable
reason, that all paper of these two varieties alone are excluded from the
E
concession. [809E-G]

2.3 Though no meticulous reasons can always be made available
or discovered for variations in rates of duty as between various types of

L- goods and the absence of some common thread· in relation .to a set of
goods treated alike may not necessarily render the classification irra-
tional or arbitrary, it can legitimately be postulated that the denial of a
F

·~
concession to a group proceeds on the basis of some aspect or feature
common to all items in the group. If such a principle can be conceived of
which would rationalise the inclusion of all the items, it would be quite
reasonable and proper to give effect to a construction of the notification
G
as will accord with that principle. [808F-G]

2.4 In interpreting the scope of any notification, the Court has
?- first to keep in mind the object and purpose of the notification. All parts
of it should be read harmoniOusly in aid of, and not in derogation, of
that purpose. [811FJ
H
800 SUPREME COURT REPORTS [1990} 2 S.C.R.

Collector of Central Excise v. Parle Exports (P) Ltd., [1989] -i
A sec 345 and Tata Oil Mills Co. Ltd. v. C.C.E., [1989] 4 SCC 541, \
referred to.

In the instant case, the aim and object of the notification is to
grant a concession to small scale factories which manufacture paper
B with unconventional raw materials. If the proviso had referred only to
coated paper no special object or purpose would have been discernible
and perhaps there would have been no justification to look beyond it
and enter into a speculatfon as to why the notification should have
thought of exempting only coated paper manufactured by these
factories from the purview of the eyemption. But the notification

c
excepts not one but a group of items. If the items mentioned in the -(.!
group were totally dissimilar and it were impossible to see any common
thread running throu~h them, again, it may be permissible to give the
exceptions their widest latitude. But when four of them-undoubtedly,
at least three of them-can be brought under an intelligible classifica-
tion and it is also conceivable that the Government might well have
D thought that these small scale factories should not be eligible for
the concession contemplated by the notification where they manufac-
ture paper catering to industrial purposes, there is a purpose in the
limitation prescribed and there is no reason why the rationally logical
restriction should not be placed on the proviso based on this classi-
fication. [811H; 812A-e]
E
The only reasonable way of interpreting the proviso is by under-
standing the words 'coated paper' in a narrower sense consistent with
the other expressions used therein. [812D]

3. The principle of statutory interpretation IJy which a generic
F word receives a limited interpretation by reason of its context is well
established. The expression noscitur a sociis simply means that the
meaning of a word is to be judged by the company it keeps [SIOA-B)

In the context of the instant case, this principle_ can be legitimately
drawn upon. However, the Jatin maxims and precedents are not to be
G mechanically applied; they are of assistance only in so far as they
furnish guidance by compendiously summing up principles based on
rules of common sense and logic. [811E-F] -

State v. Hospital Mazdoor Sabha, [1960] 2 SCR 866; Rainbow
Steels Ltd. v. C.S. T., [1981] 2 sec 141 and Lethang v. Coopex, [1965]
H 1 QB 232, referred to.
RBHIT·PAPER MILLS v. C.C.E IRANGANATHAN. fl 8Gl

I
''The Dictionary of Paper published by the American Paper-and
11
A
! PulpAsso<:llltion (Second Edition), referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 17
and 18 of 1989.
B
From the Jud_gment and Order dated 3.10.1988 of the Customs,
y Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal
Nos. E/2123 of 1987-C and E/2124 of 1987.C in Order Nos, 738 and
731}of19SS..C.

-~.!--· K. Parasaran, V. Balachandran and M.V. Madhava Rao for the c
Appellant.

~ Ashok H. Desai, Solicitor General, Ms. Indu Malhotra and
P. Parmeshwaran for the Respondents.

The Judgment of the Court was delivered by D

llANGANATHAN. J. These ·are .two appeals nuder section 35-L
of the Central Excises and Salt Act, 1944(hereinafter referred to as 'the
/ ·Act'). They arise out of the claim of Mis Rohit Pulp and Paper Mills
Ltd. (hereinafter referred to as 'the assessee') for partial exemption E
from excise duty in respect of the art paper and chromo paper
manufactured,i>y it,

~
The assessee is having a factory at Khadki in which different
varieties ot paper and paper boards are manufactured. The factory
does not have a bamboo pulp plant. It uses waste paper and cereal F
~ straw which are considered to be unconventional raw materials for the
mafinfaeture of paper and paper board. The pulp used by the assessee
contains more _than 50% by weight of pulp made from these unconven-
tionalrawmatetials.

G
'Pa1>er and paper board' are goods falling under item 17( 1) of the
first schedwe to the Act. Two notifications were issiied on. lsi March,
,>-- 1984 under rule 8(1) of the Central Excises Rules, 1944 in respect of
the above item. The· first of them, being notification No. 24 of 1984,
restricted the excise duty on items falling under the aforesaid item in
the manner following: H
802 SUPREME COURT REPORTS (1990) 2 S.C.R.

\
A S. No. Description Rate \
·-'---
1. Printing and writing paper. Ten per cent ad valorem paper
plus one thousand and five
rupees per metric tonnes.
B
2. All sorts of paper commonly Ten per cent ad valorem plus
known as kraft paper (includ- one thousand three hundred T
ing paper and paper boards of and eighty five rupees per
the type known as kraft liner metric tonne.
or corrugating medium) of a
substance equal to or exceed- ~c_
c ing 65 grammes per square
metre.
)'

3. Paper board of the following Ten per cent ad valorem plus
varieties, namely, pulp board one thousand eight hundred
duplex board and triplex and ten rupees per metric
D
board. tonne.

4. Paper and paper boards, other Ten per cent ad varlorem plus
than those specified in S. Nos. 1 one thousand four hundred and .,
to 3. thirty rupees per metric tonne. .~

E
The second notification, notification No. 25 of 1984, is the one
with which we are directly concerned here. It provides for a concession
in respect of paper and paper boards falling under item 17(1) of the
Schedule, manufactured out of pulp containing not less than 50 per

F
cent by weight of pulp made from materials (other than bamboo,
hardwoods, softwoods, reeds or rags) and cleared on or after the 1st ~
day of April in any financial year. The concessional rates prescribed
4.
were as below:

S. No. Description Rate Conditions

1. (i) Printing and writ- Rs. 450per Provided that the total
G
ingpaper metric tonne quantity of clearances,
if any, of all varieties
~
(ii)All sorts of paper Rs. 450 per of paper and paper '
commonly known as metric tonne boards in the.pr.eceding
kraft paper (includ- financial year, by or on
H ing paper & papet benhalf of a manufac-
ROHIT PAPER MILLS v. C.C.E [RANGANATHAN, J.] 803
I
boards of the type turer, from one or more
J
__:- known as kraft liners factories, or from a
A
or corrugating medium) factory by or on behalf
of a substance equal to of one or more manufac-
or exceeding 65 turers did not exceed
grammes per square 3,000 metric tonnes.
metre. B
'T' (iii) Others Rs. 560per
metric tonne.
2. (i) Printing and writing Rs. 730per Provided that the total
-1 writing paper metric tonne quantity of clearances of
all varieties of paper &
(ii) All sorts of papers Rs. 730 per paper boards in the pre- c
commonly known as metric tonne ceding financial year,
..,,,....-
_, kraft paper (including by or on behalf of a
paper and paper boards manufacture, from one or
of the type known as more factories or from a
kraft liners or corrugating factory by or on behalf of D
medium) of a substance one or more manufac-
..equal to or exceeding 65 turers, exceedings 3,000
grammes per square metric tonnes but did not
metre. exceed 7 ,500 metric
tonnes.
(iii) Others Rs. 900 per E
metric tonne.
3. (i) Printing and writ- Rs. 900per Provided that the total
ing paper metric tonne quantity of clearances of
..__. all varieties of paper &
(ii) All sorts of paper Rs. 900per paper boards in the pre-
' F
+ commonly known as
Kraft paper (includ-
metric tonne ceding financial year, by
or on behalf of a manu-
ing paper & paper facturer, from one or
boards of the type more factories or from a
known as kraft liners factory or on behalf of
or corrugating medium) one or more manufacu-
rers, exceeding 7 ,500 G
of a substance equal
to or exceeding 65 gram· metric tonne but did not
).....__
mes per square metre. exceed 16,500 metric
tonnes:

(iii) Others Rs. l, 120 per
metric tonne. H
804 SUPREME COURT REPORTS [1990] 2 S.C.R.

4. [This para, added by notification no. 92/84 dated \
A 18.4.84 added another concessional rate where the clear-
ance• exceeded 10,500 but did not exceed 24,000 metric
tonnes on the same lines as above but this does not need to
be set out here]"

B The grant of the above concessional rates were, however, subject
to certain important conditions set out in the provisoes to the notifica-
tion. These provisoes read: I
-
"Provided that the factory does not have a plant
attached thereto for making bamboo or wood pulp.
-(..:
c Provided further that the exemption contained in this
notification shall not apply to cigarette tissue, glassine
paper, grease proof paper, coated paper (including waxed
.,,
paper) and paper of a substance not exceeding 25 grammes
per square metre."
D
Another notification No. 45 of 1985 dated 17.3.1985 bas been
relied upon in support of the contention of the Union of India and
hence this may also be set out here. It prescribed rates on paper and
paper hoard falling under item 17(1) in the following manner:
~

E
S.No, Description Rate

1. Printing and writing paper-

~
(i) coated paper Ten per cent ad valorem plus
one thousand five hudred and
F five rupees per metric tonne.
-1.
(ii) of a substance not exceeding Ten per cent ad valorem plus
25 grammes per square metre one thousand five hundred and
five rupees per metric tonn.e

G (iii) Others Ten per cent ad valorem plus
one thousand tive hundred and 1
five rupees per metric tonne. _,.._
2. All sorts of paper commonly Ten per cent ad va/orem plus
known as kraft paper (includ- one thousand five hundred and
H ing paper and paper boards eighty-five rupees per metric
ROHIT PAPER_MILLS v. C.C.E [RANGANATIIAN, J.] 805

I
<___..;..--._ -
ot the type known as.kraft
liner or corrugating medium)
tonne. A

of a substance equal to or
exceeding 65 grammes per
square metre.

3. Coated paper (including Ten per cent ad valorem plus B
waxed paper) and paper of one thousand nine hundred
y
a substance not exceeding and thirty rupees per metric
25 grammes per square metre tonne.
(other than those specified
~;
---.: in SI. No. 1).
c
4. Glassine paper, cigarette_ Ten per cent ad valorem plus
,_, tissue and grease proof one thousand nine hundred
paper. and thirty rupees per metric
tonne.

5. Paper board of the following Ten per cent ad valorem plus D
varieties, namely, pulp board, one thousand eight hundred
duplex board and triplex and then rupees per metric
board. tonne.

;.i 6. Paper and boards, other Ten per cent ad valorem plus
than those specified in one thousand four hundred E
SI. No. 1 to 5. 11nd thirty rupees per metric
tonne,

The assessee seems initially to have paid excise duty on the goods
manufactured by it in terms of notification No. 24/84 but later seems to
have thought of claiming the concessional rates prescribed by notifica- F
tion No. 25/84. The company was manufacturing art paper and chromo
paper. It is. common ground that these two types of paper fall under
category "printing_and writing paper". It is also common ground that
these two articles also fall under the description "coated paper" used
in the second proviso. Since coated paper is taken by the proviso out of
the purview of the notification No. 25 of 1984, the Excise Department G
refused to permit the assessee to avail of this concession in respect of
its manufactured goods. This treatment by the Excise Department has
also been confirmed by the Central Excise and Gold Control Appel-
late Tribunal (CEQAT). The Tribunal disposed of ihe matter very
briefly. It observed;
H
806 SUPREME COURT REPORTS l 1990) 2 S.C.R.

A
"37. That brings us to the second question whether art
paper and chroma paper were eligible for the exemption
\
granted under notification No. 25 of 1984. We have care-
fully considered arguments of the appellants. We have
perused the notification No. 24 of 1984 as amended and
note that the second proviso excludes from the exemption,
B among others, coated paper (including waxed paper).
There is no denial that art paper and chroma paper are
coated papers. It may be correct that these are not, like other T
papers mentioned in second proviso, industrial varieties of
papers and are writing and printing varieties. All the same
when the proviso, as it is worded, is clear there is no
warrant for us to supply words to the proviso to the notifi-
c cation. We, therefore, find against the appellants in this
regard and hold that art and chroma paper would not be
• eligible for exemption undernotification No. 25 of 1984."
(emphasis added)

D The assessee is aggrieved by this order of the Tribunal and hence the
present appeals.

Sri K. Parasaran, appearing for the appellant, raises an ingenious
contention. He urges that though the expression 'coated paper' has
generally a wide connotation and includes coated papers of all
E varieties, it should be given a restricted meaning in the context in
which it appears in the proviso. It is submitted that in the paper busi-
ness, paper is broadly of two varieties, "industrial paper" and
"cultural paper". Paper used for printing or writing is treated as
cultural paper. On the other hand, industrial paper is paper which is
used for various purposes which may be broadly described as industrial
F purposes, such as wrapping, packing sanitary use and the like. It is
submitted that though the notification intended to grant a concession.
to small factories manufacturing paper out of unconventional raw
material, it was decided to deny the concession to certain kinds of
paper. These exceptions have been set out in the proviso. They are: (1)
cigarette tissue, (2) glassine paper, (3)grease proof paper, (4) coated
G paper (mcluding waxed paper), and (5) paper of substance not exceed-
mg 25 gm. per square metre in weight (which may be compendiously
described as light paper). It is argued that a common strain runs
through all these ttve categories. The first three varieties, namely,
cigarette tissue, glassine paper and grease proof paper admittedly fall
under the category of industrial paper. Likewise, paper of a substance
H not exceeding 25 gm. per square metre in weight is invariably used for
ROHJT PAPER MILLS v. C.C.E [RANGANATHAN, J.] 807

industrial purposes and this is so found by the Tribunal. The word
! 'coated paper', it is urged, must be read in this context. Since the other
A
items set out in the proviso are items of industrial paper, it stands to
reason that though 'coated paper', in a wider sense, may include all
categories of coated paper, the denial of concession by the proviso is to
bo; restricted only to coated paper falling under the industrial variety.
In other words, it is submitted that the word 'coated paper' should be B
interpreted by applying the principle of "Noscitur A Sociis" or on the
analogy of the "Ejusdem generis" principle. This contention, it is
submitted, is re-inforced by two considerations. The first is that the
Government must have had some idea or principle in putting together

-- the exceptions and there is no conveivable principle other than the one
enunciated. The second consideration is the addition of the words used
m parenthesis along with 'coated paper' viz. "(including waxed
c
paper)". It is pointed out that waxed· paper obviously means coated
paper because waxed paper is nothing but paper coated with wax and
would have anyhow been covered by the exception. Nevertheless, it
was considered necessary, it is said, to specifically include it in order to
make it dear by this illustration that only industnal paper like waxed D
paper is taken out from the concession. The words in parenthesis are,
in other words, the words illustrative of the limitation to be read into
the expression 'coated paper'. It is finally al'gued that, even if the
words of the proviso are capable of being construed in a wider manner
so as to deny exemption to all kinds of coated paper, the Court should
apply the well established principle of construction of taxing statutes E
that an ambiguous provision should be interpreted in favour of the
subject.

On the other hand, the learned Solicitor General submits that if
there are two possible views of the proviso, the Court should not
interfere with the conclusion reached by the Tribunal which reflects F
one of two possible and plausible views. On the _interpretation of the
proviso, the Solicitor Gener.al submits that there is no pnnciple of
interpretation by which the plain and natural meaning of the word
'coated paper' can be abridged nor, he says, is there anything in the
context to warrant such a limitation. He refutes the suggestion that, in
commercial parlance, there is a clear cut distinction between indust- G
rial and cultural paper. He does not agree that light paper can only be
industrial paper and refers to the terms of the 1985 notification in sup-
port. He points out that if coated paper meant only industrial paper, as
contended for by the assessee, the expression in parenthesis was
totally unnecessary. He submits that there is a distinction between
coated paper and impregnated paper. As waxed paper could fall under H
808 SUPREME COURT REPORTS [1990] '.'. S.CR.

A either of these categories, there was a possibility of some one contend-
ing that paper impregnated with wax is not 'coated paper'; that is why
\
it became necessary to add the parenthesis to clarify that both kinds
will be 'coated paper' for the purposes of the proviso. He submits for
these reasons that the view taken by the Tribunal was the correct one
and that the appeals should be dismissed.
B

We have considered the contentions urged on both sides and we
have come to the conclusion that there is force in the appellant's
contentions. All the three notifications we have extracted above draw
a distinction between printing and writing paper on the one hand and
other types of paper on the other. They also show that the duty on
c printing and writing paper is generally less than that on the other
varieties of paper. Though paper can be classified into various
varieties, it does appear that one such classification is between indust-
rial paper and cultural paper. "The Dictionary of Paper" published by
the American Paper and Pulp Association (Second Edition) contains
D the following definition:

Industrial Papers-A very general term which is used for to
indicate papers manufactured for industrial uses as oppo-
sed to those for cultural purposes. Thus, building papers,
insulative papers, matching paper etc. would be considered
E industrial papers whereas writing and printing papers
would be cultural papers.

Now the proviso denies the concession extended by notification
No. 25/84 to certain types of papers. It is true that no meticulous
reasons can always be made available or discovered for variations in
F rates of duty as between various types of goods and the absence of
some common thread in relation to a set of goods treated alike may not
necessarily render the classification irrational or arbitrary. But, at the
same time, one can legitimately postulate t)l.at the denial of a conces-
sion to a group proceeds on the basis of some aspect or feature com-
mon to all items in the group. If such a principle can be conceived of
G which would rationalise the inclusion of all the items, it would be quite
reasonable and proper to give effect to a construction of the notifica-
tion as will accord with that principle. It is this which the appellant has
attempted to do and we are mclin_ed to think that the ratiocination of .......
the exceptions suggested, far from being artificial or far-fetched, i_s a
plausible and likely one that the Government could have had in mind
H ·and that it should be accepted.
ROHH PAPER MILLS v. C.C.E (RANGANATHAN, J.) 80<)

I As mentioned earlier, the concession of the notification is denied A

·-· to five kinds of paper. Three of them, undoubtedly and indisputably,
are varieties of industrial paper. This is indeed common ground and it
has also been supported by reference to the definitions in the Dictio-
nary of Paper and elsewhere which it is unnecessary to set out here.
The fourth is what we have referred to as 'light paper' not exceeding a
particular weight. On behalf of the assessee, it is contended that this is. B
also only industrial paper. In support of this contentipn, reference is
invited to the tables appended to the Dictionary of Paper which indi-
cate that there cannot be printing and writing paper of weight less than
26 gms per sq. metre. It is also pointed out that the Tribunal has also
given a finding to this effect in para 37 of its order. The learned
Solicitor General, on the other hand, points out that S. No. 1 (ii) of the
1985 notification itself clearly shows that there can be "printing and c.
writing paper of a substance not exceeding 25 gramms per sq. metre".
On behalf of the assessee, on instructions, it is -submitted that this
classification proceeds on a totally unreal basis and that there is uo
such printing and writing paper in existence. We cannot, however,
assume that the"1985 notification proceeds on an erroneous basis. It is D
sufficient for our purposes to take it, on the basis of the record in this
case, that light paper is, by and large, industrial paper without
altogether excluding all possibility that it is used occasionally for
cultural purposes also. The classification set out in the 1985 notifica-
/ tions also lends some support to the contentions urged. The five
varieties of paper we are concerned with are found in serial Nos. 3 and E
4 of this notification and serial Nos. 1 and 3 reflect a contrast between
coated paper and llght paper used for cultural purposes (item No. 1)
and that used for other (industrial) purposes (item No. 4). On this basis,
then, it is clear that four out of the five varieties of paper which are
denied the benefit of the concession seem to constitute industrial
paper. In fact even if, as urged for the Union of India, only three of· F
these items are of the industrial variety while the other twO could be
either, it will not still be unreasonable (though, may be, a little less
plausible) to draw an inference that only industrial paper falling in
those two categories are intended to be comprehended in the classifi-
cation rather than assume, for no detectable reason, that all paper of
these two varieties alone are excluded from the concession. We think, G
therefore, that the appellants are on firm ground in submitting that the
expression 'coated paper' in the proviso should draw colour from the
..>- context in which it is employed and receive an interpretation consis-
tent therewith than its literal one, which in its widest sense, may be
comprehensive enough to include all coated paper, industrial or
otherwise. H
810 SUPREME COURT REPORTS [19901 ~ S.C.R.

A The principle of statutory interpretation by which a generic word
receives a limlled interpretation by reason of its context is well es-
tablished. In the context with which we are concerned, we can legiti-
mately draw upon the "noscitur a sociis" principle. This expression
simply means that "the meaning of a word is to be judged by the
company it keeps." Gajendragadkar, J. explained the scope of the rule
B
in State v. Hospital Mazdoor Sabha, [1960] 2 SCR 866 in the following
words:

"This rule, according to Maxwell, means that, when two or
more words which are susceptible of analogous meaning
are coupled together they are understood to be used in
c their cognate sense. They take as it were their colour from
each other, that is, the more general is restricted to a sense
analogous to a less general. The same rule is thus inter-
preted in "Words and Phrases" (Vo. XIV, p. 207):
"Associated words take their meaning from one another
under the doctrine of nosciture a sociis, the philosophy of
D
which is that the meaning of a doubtful word may be
ascertained by reference to the meaning of words asso-
ciated with it; such doctrine is broader than the maxim
Ejusdem Generis." In fact the letter maxim "is only an
illustration or specific application of the broader maxim
noscitur a sociis". The argument is that certain essential
E
features or attributes are invariably associated with the
words "business and trade" as understood in the popular
and conventional sense, and it is the colour of these attri-
butes which is taken by the other words used in the defini-
tion though their normal import may be much wider. We
are not impressed by this argument. It must be borne in
F
mind that noscitur a sociis is merely a rule of construction
and it cannot prevail in cases where it is clear that the wider
words have been deliberately used in order to make the
scope of the defined word correspondingly wider. It is only
where the intention of the Legislature in associating wider
words with words of narrower significance is doubtful, or
G
otherwise not clt:ar that the present rule of construction can
be usefully applied. It can also be applied where the mean-
ing of the words of wider import is dobtful; but, where the
object of the Legislature in usin~ wider words is elem and
free of ambiguity, the rule <Jf construction in question can-
not be pressed into service."
H
RUHIT PAPER MILLS v. C.C.E [RANGANATHAN, J.] 811

This principle has been applied in a number of contexts in judicial A
I decisions where the Court is clear in its mind that the larger meaning
-- of the word in question could not have been intended in the context in
which it has been used. The cases are too numerous to need discussion
· here. it should be sufficient to refer to one of them by way of illustra-
tion. In Rainbow Steels Ltd. v. C.S. T., [1981] 2 SCC 141 this Court had to
understand the meaning of the word 'old' in the context of an entry in a B
taxing tariff which read thus:

"Old, discarded, unserviceable or absolute machinery,
stores or vehicles including waste products ..... "

Though the tariff item started with the use of the wide word 'old', the
Court came to the conclusion that "in order to fall within the expres-
c
sion 'old machinery' occurring in the entry, the machinery must be old
machinery in the sense that it has become non-functional or non-
usable". In other words, not the mere age of the machinery, which
would be relevant in the wider sense, but the condition of the machi-
nery analogous to that indicated by the words following it, was con- D
sidered relevant for the purposes of the statute.

The maxim of noscitur a sociis has been described by Diplock,
C.J. as a "treacherous one unless one knows "the societas to which the
I socii belong" (vide: Letang v. Coopex, [1965] 1 QB 232). The learned
Solicitor General also warns that one should not be carried away by E
labels and Latin maxims when the word to be interpreted is clear and
has a wide meaning. We entirely agree that these maxims and prece-
dents are not to be mechanically applied; they are of assistance only in
so far as they furnish guidance by compendiously summing up principles
based on rules of common sense and logic. As explained in Collector of
Central Excise v. Parle Exports (P) Ltd., [1989] 1 SCC 345 at p. 357 F
··~ and Tata Oil Mills Co. Ltd. v. C.C.E., [1989] 4SCC541atp.545-6in
interpreting the scope of any notification, the Court has first to keep in
mind the object and purpose of the notification. All parts of it should
be read harmoniously in aid of, and not in derogation, of that purpose.
In this case, the aim and object of the notification is to grant a conces-
sion to small scale factories which manufacture paper with unconven- G
tional raw materials. The question naturally arises: Could there have
been any particular object intended to be achieved by introducing the
exceptions set out in the proviso? Instead of proceeding on the pre-
mise that it is not necessary to look for any reason in a taxing statute, it
is necessary to have a closer look at the wording of the proviso. If the
proviso had referred only to 'coated paper', no special object or H
812 {199()) 2 3.C.R.

A purpose would have been discernible and i)erhaps there would have
been no justification to look beyond it and enter into a speculation as
to wny the notification should nave thought of exempting only 'coated
paper' manufactured by these factories from the purview of the
exemption. But the notification excepts not one but a group of items.
If the items mentioned in the group were totaily dissimilar and it were
B impossible to see any common thread running through them again, it
may be permissible to give the exceptions their widest latitude. But
when tour of them-undoubtedly, at least three of them-can be
brought under an intelligible classification and it is also conceivabl!'
that the Government might well have thought that these small scale
factories should not be eligible for the concession contemplated by the
c notification where they manufacture paper catering to industrial
purposes, there is a purpose in the limitation prescribed and there is no
reason why the rationally logical restriction should not be placed on
the proviso based on this classification. In our view, fhe only reason-
able. way of interpreting the proviso is by understanding the words
'coated paper' in a narrower sense oonsistent with the other expres
D sions used therein.

In the view we have taken it is unnecessary to consider the other
contedtions urged before us: (i) whether the words "(including waxed
paper)" are words indicative of the limitation sought to be placed on \.
the words "coated paper" or they are only intended to make it dear ......,
E that even paper impregnated wit1!. wax will not be entitled to exemp-
tion; and (ii) whether, if the notification is capable of two equally
plausible interpretations, the one in favour of the subject should be
upheld or the one taken by the Tribunal should be confitnied·

For the reasons discussed above, we accept the appellant's sub-
F mission that 'coated paper' in the second proviso refers,pn!y to coated
paper used for industrial purposes and not to ooated vaneties of print-
ing and writing paper. The Tribunal's order is set aside and the appel-
lant held entitled to the concessional rates specified in notification
No. 25/84.

G The .appeals are allowed. But we make no order as to costs.

N.P.V. Appeal allowed: