Page 245 - ELT_2nd_15th April 2020_Vol 372_Part

2020 ] PEE CEE COSMA SOPE LTD. v. COMMISSIONER OF CENTRAL EXCISE, KANPUR 291

ture of sweet was not accepted. It is not the case of the Department in the present
that ‘electricity’ cannot be used for the manufacture of leather soaps. The deci-
sion of the Karnataka High Court would not come to the aid of the Department.
35. The meaning of the expression ‘power’ as contained in dictionaries
should also not be blindly applied to the meaning of the expression ‘power’ as
contained in the Tariff Act and the exemption notification and an attempt should
be made to find out a meaning which would achieve rather than frustrate the
object-of granting exemption and that meaning should be preferred which does
not lead to uncertainty or unintended results.
36. In this connection, it will be useful to refer to a decision of the
Supreme Court in Pappu Sweets and Biscuits v. Commissioner of Trade Tax, UP,
Lucknow [2004 (178) E.L.T. 48 (S.C.)]. The question that arose for consideration
before the Supreme Court was whether ‘toffee’ is a ‘sweetmeat or a commodity
of a like nature because this would determine whether the industrial unit would
be entitled to exemption from payment of Sales Tax under a Notification dated
27 July, 1991 issued by the State of Uttar Pradesh, in exercise of its powers con-
ferred under Section 4A of the Uttar Pradesh Sales Tax Act, 1948. Units making
sweetmeat, namkeen, reori, gazak and commodities of the like nature and res-
taurants were not entitled to the facility of exemption. The Supreme Court ob-
served that for deciding whether ‘toffee’ is ‘sweetmeat’ in terms of the exemption
notification, what has to be considered is the object of the notification and the
context in which that word has been used in the notification. The relevant obser-
vations are as follow :
“8. It is true that dictionary meaning of the word ‘sweetmeat’ is very wide
and any food which is sweet and rich in sugar can be described as ‘sweet-
meat’. Toffee is a confection of sugar and other materials and being rich in sugar
would ‘sweetmeat’ in its wider sense. But for deciding whether toffee is ‘sweetmeat’
as contemplated by the exemption Notification, what is required to be considered is
the object of the notification and the context in which that word is used in the noti-
fication.
9. A close reading of the Notification discloses that the State intended to
give benefit of exemption or reduction in rate to these new industrial units
and existing units undertaking expansion, diversification or modernization
which were to make substantial capital investment. Paragraph 2 of the No-
tification prescribing conditions of having licence or a letter of intent and of
owning land or building or taking them on lease for a period of not less
than 15 years and paragraph 3 prescribing fixed capital investment consist-
ing of land, building, plant, machinery, equipment and apparatus are in-
dicative of that intention. Entry 18 of Annexure II is also suggestive of the
same intention. The items mentioned therein viz. ‘sweetmeat’, ‘namkeen’, ‘reori’,
and ‘gazak’ are usually prepared by shopkeepers and restaurants for selling them to
their consumer-customers. They are not manufactured in factories having plants
and machinery.
10. The notification further discloses that the object of declaring exemp-
tion from payment of sales tax was to increase industrial activity within the
State by encouraging setting up of new industrial units or expansion, diver-
sification or modernization by the existing industrial units. At the same
time the State did not desire to extend that benefit to all such industries. It
was therefore specifically stated in the notification that industries men-
EXCISE LAW TIMES  15th April 2020  261