Seetharam Reddy, J.
1. This case is no exception to the observation of Lord Summer - 'The way of taxpayers is hard and the Legislature does not go out of its way to make it any easier'.
2. The Sirpur Paper Mills, a public limited company, brought this appeal against the judgment of our learned brother, Raghuvir J., in W.P. No. 7092 of 1974 filed by it for the issue of a writ of certiorari or mandamus.
3. The statement of case, in brief, as per the averments of the writ petitioner i : The Finance Act, 1965, provided for the grant of tax credit certificates by inserting Chapter XXII-B in the I.T. Act, 1961, through s. 280ZD. Section 280ZD provides, inter alia, for the grant of tax credit certificates in relation to increased production of goods at a rate not exceeding 25% of the excise duty payable on that quantum of goods cleared during the base year, which is the official year 1964-65, in respect of existing undertakings, and, as respects other undertakings, the first year in which they commence production. It also defines 'duty of excise' as excise duty leviable under the Central Excises and Salt Act, 1944 (Act 1 of 1944). Section 280ZD empowers the Central Government to frame one or more schemes to be called 'tax credit certificate schemes'
4. Accordingly, a scheme under notification No. 1636 dated November 5, 1965, has been framed, wherein the class of goods and the rate of tax credit certificate are mentioned in Schedule I. Item 3 of the said Schedule relates to 'paper, all sorts, other than, (i) newsprint, and (ii) boards...' falling under Item 17 of the First Schedule to the Central Excises and Salt Act, 1944, and the corresponding rate of tax credit is 15%.
5. By s. 3(1) of the Central Excises and Salt Act, 1944, duties of excise shall be payable don all excisable goods at the rates set for the in the First Schedule to the Act. The First Schedule enumerates the excisable goods under different items. Item 17 of the Schedule gives the description of goods as, 'papers all sorts) in or in relation to the manufacture of which any process is ordinarily carried on with the did of power'. The distinct rate of excise duty on various varieties or types of paper falling under Item 17 ranging from 35 p. to 100p. per kg. has been shown herein.
6. A special duty of the excise equal to 20% of the total amount of duty of excise chargeable under the Central Excises and Salt Act was levied under the Finance Acts, 1968 and 1969, relevant for the official years 1968-69 and 1969-70.
7. The petitioner applied in the two financial years 1968-69 and 1969-70 under the prescribed form for the grant of tax credit certificates under s. 280ZD of the I.T. Act. The types of paper manufactured by the petitioner fall under items 17(2), 17(3) and 17(4) of the First Schedule to the Central Excises and Salt Act. In both the financial years, there was excess clearances in Items 17(2) and 17(4) and deficit clearance in item 17(3). the total excess clearance under the aforesaid two items for the financial year 1968-69 is 9,76,674.26 kg. and for the financial year 1969-70 21,23,129.19 kg. and in the financial years 1968-69 and 1969-70, the deficit under Item 17(3) is 3,15,801.19 kg. and 17,81,647.22 kg., respectively. The petitioner, therefore, applied for the tax credit amount of Rs. 87,900.68 and Rs. 1,79,901.93 for the financial years 1968-69 and 1969-70 as under on the excess clearance under Items 17(2) and 17(4 :
Clearance under items 17(2) and 17(5 : (i) Financial year 1968-6 :Rs.Excess clearance 9,76,674.26Excise duty thereon at 50 p. per kg. 4,88,277.09Special excise duty at 20% of the exciseduty. 97,667.42Total excess duty on excess clearance 5,86,004.51Amount of tax credit certificate at 15% ofthe excise duty on excess clearance. 87,900.68(ii) Financial year 1969-7 :Excise duty thereon at Rs.50 p. per kg. on Kgs. 12,95,003.89 6,47,502.0042.5 ' 8,28,125.30 3,51,953.25_______________ ______________21,23,129.19 9,99,455.25-------------- --------------Special excise duty at 20% of the exciseduty. 1,99,891.05Total excise duty on the excise clearance. 11,99,346.30Tax credit certificate at 15% of the exciseduty on the excess clearance. 1,79,91.93
8. However, the Deputy Director of Inspection (2nd respondent herein) granted tax credit certificates for Rs. 49,565 and Rs. 24,823, respectively for the said two years. This was worked out by setting off the deficit under Item 17(3) against the excess clearance under Item 17(2) and Item 17(4). Secondly, the special excise duty of 20% on the duty of excise was not considered on the ground that the special excise duty is not a duty of excise levied under the Central Excises and Salt Act as defined under s. 280ZD(6)(b) of the I.T. Act. Aggrieved, the petitioner preferred an appeal to the Director of Inspection (1st respondent herein), which resulted in dismissal. Hence, the writ petition for the issue of a writ of certiorari to quash the aforesaid orders of the respondents and for the issue of a consequential direction to them to issue to the petitioner cash credit certificates treating each item specified in Item 17 of Schedule I separately and excluding the shortfall under Item 17 thereof and also, further, to take into account the additional excise duty levied under the Finance Act for the purpose of calculating the amount due towards tax credit under s. 280ZD of the I.T. Act.
9. The writ petition was dismissed by our learned brother, Raghuvir J. Hence this writ appeal.
10. The points, therefore, that arise for adjudication ar :
(1) Whether the amount of tax credit certificate to which the company is entitled should be determined item-war or with reference to the aggregate quantity of all varieties of paper manufactured
(2) Whether the tax credit certificate should also cover the special excise duty payable by the company under the relevant provisions of the Finance Acts.
11. The relevant statutory provisions may be set out. Section 280ZD of the I.T. Act is as unde :
'280ZD. (1) Subject to the provisions of this section, a person, who during any financial year commencing on the April 1, 1965, or any subsequent financial year (not being a year commencing on the April 1, 1970, or any financial year thereafter) manufacturers or produces any goods, shall be granted a tax credit certificate for an amount calculated at a rate not exceeding twenty-five per cent of the amount of the duty of excise payable by him on that quantum of the goods cleared by him during the base year, whether the clearance in either case is for home consumption or export.
(2) The goods in respect of which a tax credit certificate shall be granted under sub-section (1) and the rate at which the amount of such certificate shall be calculated shall be such as may be specified in the schem :
Provided that different rates may be specified in respect of different goods. (3) In specifying the goods and the rates under sub-section (1), the Central Government shall have regard to the following factors, namel :-
(a) the need for stimulating industrial output;
(b) the need for financial assistance to industrial undertakings engaged in the manufacture or production of such goods;
(c) any other relevant factor....
(6) In this section -
(a) 'base year', in relation to an existing undertaking which manufactures or produces the goods referred to in sub-section (1), means the financial year commencing on the April 1, 1964, and in relation to any other undertaking, the financial year in which such undertaking begins to manufacture or produce such goods;
(b) 'duty of excise' means the duty of excise leviable under the Central Excises and Salt Act, 1944 (I of 1944).'
12. The Tax Credit Certificate (Excise Duty on Excess Clearance) Scheme, 1965, for short 'Scheme', as envisaged under sub-s. (2) of s. 280ZD has been framed under Notification No. 1636 dated November 5, 1965. Clause (3) of the Scheme refers Schedule I to the Scheme whereunder the class of goods and the rate of tax credit certificate have been laid down a unde :
________________________________________________________________________Sl. No. Class of goods. Item No.in Rate being thethe first percentage of duty Schedule to of excise payable onthe act. the quantum of goodscleared in therelevant financialyear in excess ofthe quantum clearedor deemed to havebeen cleared in thebase year._______________________________________________________________________(1) (2) (3) (4)-----------------------------------------------------------------------(1) ...(2) ...(3) Paper, all sorts, other than(i) newsprint, and (ii) boardsincluding paste-board, millboard, straw board, pulp board,card and coated board. 17 15%Explanation. - Newsprint referredto above shall be deemed to bepaper containing mechanical woodpulp amounting to not less than 50per cent. of its fibre con-tent...-----------------------------------------------------------------------Item 17 in Schedule I to the Central Excises and Salt Act.hereinafter referred to as the 'Excise Act', is in the following term :_______________________________________________________________________Item No. Description of goods. Rate of Duty(1) (2) (3)-----------------------------------------------------------------------17. PAPE : all sorts (including pasteboard,mill-board, strawboard, and cardboard),in or in relation to the manufacture ofWhich any process is ordinarily carriedon with the aid of power -(1) cigarette tissue One rupee per kilogram(2) blotting, toilet, target, tissue,tele-printer, typewritting, manifold,bank, bond, art paper, chrome paper,tubsized paper, cheque paper, stamppaper, cartridge paper, and parchmentand coated board (including art board,chrome board and board for playingcards). Fifty paise per kilogram(3) Printing and writing paper, packingand wrapping paper, strawboard and pulpboard, including grey board, corrugatedboard, duplex and triplex boards,other sorts. Thirty five paise perkilogram.(4) all other kinds of paper and paperboard not otherwise specified. Fifty paise per kilogram-----------------------------------------------------------------------
13. Section 2(d) of th Excise Act defines 'excisable goods' as 'goods specified in the First Schedule as being subject to a duty of excise and includes salt'. Paragraph 2(h) of th Scheme defines 'goods' as 'any excisable goods in respect of which a tax credit certificate can be granted under this Scheme'.
14. The first point may now be examined in the light of the above format. The appellant-petitioner manufactures sorts of paper referred to under Items 17(2),(3) and (4) of the First Schedule to the Excises Act. A reading in combination the definition of excisable goods under section 2(d) of the Excises Act and 'goods' as defined under Paragraph 2(h) of the Scheme and 'paper' as categorised under Item 17 of the First Schedule to the Excise Act, particularly setting out different rates of duty against each variety of paper as described under Items 17(2), (3) and (4), leads us to conclude that the quantum of the goods cleared by the manufacturer is in respect of each variety of paper. To hold it otherwise would be doing violence to the language. The mere fact that in column (2) of the First Schedule to the Scheme 'paper, all sorts' is mentioned without further categorising and a uniform rate of 15% provided in column (4) for the purpose of working out the relief of cash credit, does not alter the nature, character or position of 'goods', because the percentage for the purpose of cash credit relief as respects the other commodities like soda ash and caustic soda, which are different items, is equally uniform as the rate is fixed at 20%. The basic fact yet remains, and that is, under Item 17 of the First Schedule to the Excises Act, for different qualities of paper different rates of excise duties have been laid down. Secondly, if all sorts of paper are to be aggregated and excess has to be worked out while taking into consideration the deficit, if any, in one of the items, then the question is as to how the relief with reference to different rates of excise duty has to be given effect to while according the necessary tax credit relief as per the Scheme and as postulated by s. 280ZD. When the question was posed, the learned standing counsel for the Central Government submitted that the highest incidence of duty that has to be imposed on particular category of paper may be taken into account for the purpose of tax relief, as in the absence of definite provision with regard to computation, the liberal interpretation as is normally resorted to in tax matters will have to be adopted. This, in our view, can at best be called a convenient answer. If really the Legislature intended to provide for compounding varieties of paper as contemplated under Item 17, they would have made it explicit and also provided a definite formula for working out the relief to be accorded. Since the provision is conspicuous by its absence, this factor, in our judgment, would certainly lend credence to the conclusion that each variety of paper has to be distinctly and differently considere :
The further argument of the learned standing counsel for the Central Government is that this Scheme has been introduced in order to give incentive to the producer to manufacture more in quantity and, therefore, if the manufacturer concentrates only on certain types of commodity, say, in this case, the items contemplated under Items 17(2) and 17(4) while ignoring the items covered by Item 17(3), then it would certainly destroy the very object and purpose of the Scheme if the deficit so brought about under Item 17(3) is not set off as against the production under Item 17(2). We are unable to appreciate this argument either.
15. In the first place on the materials now before us, it is not possible to conclude that in a manufacturing process as carried on by the appellant-company it is possible to divert the manufacturing process of one variety to the other so that to derive an unfair benefit under a provision like s. 280ZD, the company may divert its process of production to manufacture one or two varieties only stopping the production of other varieties altogether so that it derives the benefit under the provision though the country loses in the total output of the different varieties. Be that as it may, when on the interpretation of s. 280ZD the term 'goods' must necessarily mean the different varieties of papers differently and distinctly manufactured, the appellant gets the benefit only on proof of higher output of the said goods and the mere fact that it had a shortfall in manufacturing different goods simultaneously manufactured by it is no reason to deny the benefit which the law confers on it. That being the position, we find no merit in the contention of the respondents that the construction which found favour with the learned single judge could in any way frustrate the object behind the provision. Secondly, if this argument were to be accepted, the same also should be extended to such of the commodities that are covered by the Scheme though they are distinct and different from each other. As for instance, Item 5 of Schedule I to the Scheme refers to cement and Item 6 refers to aluminium; supposing an undertaking normally manufactures these two items, it may just as well be that for one reason or other it may produce more cement and less aluminium. Could it then be argued that there has to be a set-off in so far as the production concerning aluminium as against the production of cement which is in excess If the answer is 'no', which is obviously so in our judgment, then the same is also extended to the paper, in the present case referred to under Item 3 of the Schedule to the Scheme.
16. Yet another aspect is, even if we take the term 'goods' to mean an article which is ordinarily bought and sold in the market, even then the different varieties of paper produced or manufactured by the appellant-company cannot be considered to be one and the same goods. As for instance, the blottings and bond papers or cigarette tissues and typewriting papers cannot constitute one class of goods; they are bought and sold as distinct varieties of goods in the market and there is no reason why they should not be taken to be different and distinct goods for the purpose of grant of tax credit certificate prescribed by s. 280ZD.
17. From the foregoing, we have no hesitation in holding, that while quantifying the goods cleared by the appellant during the relevant financial year which exceeds with reference to the base year, each variety of paper will have to be worked out independently without aggregating all types of paper covered by Items 17(2), 17(3) and 17(4) of the First Schedule to the Excises Act. This views receives support from the decisions in Titaghur Paper Mills Co. Ltd. v. Union of India : 93ITR96(Cal) , Union of India v. Titaghur Paper Mills Co. : 112ITR100(Cal) and Seshasayee Paper & Boards Ltd. v. Dy. Director of Inspection  23 ITR 611.
18. Now, we come to the second contention. The point is whether the special duty of excise equal to 20 per cent of the total amount of excise duty chargeable on the goods under the Excises Act as contemplated under the Finances Acts of 1968 and 1969, levied and collected on the goods, is liable to be taken into account while determining the amount of tax credit to be certified under s. 280ZD of the I.T. Act. Section 39 of the Finance Act, 1968, read :
'39. Special duties of excise on certain goods - (1) When goods of the description mentioned in this section chargeable with a duty of excise under the Central Excises Act (as amended by this Act or any subsequent Central Act read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable, are assessed to duty, there shall be levied and collected -.. (b) as respects goods comprised in Items Nos. 2,3(1), sub-items I, II(2) and II(3) of Item No. 4, Item Nos. 13, 14, 14F, 15, 15A, 15B, 16, 16A, 17, 18A(2), 21, 22, 23 23A(1), 27, 30, 31(1), 33, sub-items (1), (3A) and (4) of Item No. 34 and Item No. 37 of that Schedule, a special duty of excise equal to 20 per cent of the total amount to chargeable on such goods; and...'
19. Section 31 of the Finance Act, 1969, also is in similar terms. Based on the language, learned counsel argued that the special duty contemplated under the Finance Act, is nothing but a duty of excise, and, therefore, it has also to be taken into account while arriving at the amount to be given credit to under s. 280ZD of the I.T. Act. Reliance was placed for this proposition on Seshasayee Paper & Boards Ltd. v. Dy. Director of Inspection  23 ITR 611 wherein a Division Bench of the Madras High Court held (p. 623 :
'Then coming to the second contention that the said excise duty levied under section 27(4) of the Finance Act has to be taken into account for the purpose of determination of the amount for which the tax credit certificate should be given, the learned counsel for the petitioner relies on the decision of the Supreme Court in Commissioner of Income-tax v. K. Srinivasan : 83ITR346(SC) , and submits that if the principle of that decision is to be applied, the special excise duty levied under section 27(4) of the Finance Act, 1973, has to be treated as part and parcel of the excise duty leviable under the Central Excises and Salt Act, 1944. In that case, it was held that though section 2 of the Finance Act, 1964, used merely the word 'income-tax', that word should be taken to include surcharge, special surcharge and additional surcharge whenever payable under the various Finance Acts, as the surcharge, special surcharge, and the additional surcharge form part of the income-tax and super tax.'
20. It further held (p. 624 :
'We are of the view that the principle laid down in the earlier decision of the Supreme Court in Commissioner of Income-tax v. K. Srinivasan : 83ITR346(SC) , will be applicable to the facts of this case rather than the subsequent decision in Madurai District Central Co-operative Bank Ltd. v. Third Income-tax Officer : 101ITR24(SC) . With respect, we are also not inclined to agree with the view expressed in Associated Cement Cos. v. Director of Inspection : 84ITR811(Delhi) . For one thing, though the special excise duty is imposed under section 27 of the Finance Act, 1973, it can be levied and collected only under the Central Excises and Salt Act in view of the provisions of sub-section (4) of that section. Secondly, the special excise duty is treated as an addition to the duty of excise payable on such goods under the Central Excises and Salt Act, by virtue of sub-section (3) of section 27. Therefore, though the charge of special excise duty is brought in by the Finance Act, the same is leviable only under the Central Excises and Salt Act as contemplated by sub-section (4) of section 27. The special duty which is also to be levied under the Central Excises Act will also come under the definition of 'duty of excise' occurring in section 280ZD(6)(b).'
21. We are unable to be persuaded by, or to accede to, the contention of the learned counsel for the appellant.
22. The High Court of Delhi, in Associated Cement Cos. v. Director of Inspection : 84ITR811(Delhi) while dealing with the tax credit certificate scheme itself with reference to the Finance Act, 1965, held that having regard to the definition of 'duty of excise' occurring in s. 280ZD(6)(b), it is not permissible to include the special excise duty levied by s. 80 of the Finance Act, 1965, for the purpose of grant of a tax credit certificate under that Scheme and that tax credit was to be given only in respect of excise duty levied under the Central Excises and Salt Act, 1944, on the excess goods manufactured and cleared.
23. The Supreme Court in Madurai Dt. Co-operative Bank Ltd. v. Third ITO : 101ITR24(SC) , held in analogous circumstances as under (p. 24 :
'The additional surcharge leviable under clause (c) of Paragraph A of Part I of the First Schedule to the Finance Act, 1963 read with section 2(1)(a)(ii) of that Act is a distinct charge, not dependent for its leviability on the assessee's liability to pay income-tax or super-tax. The new charge under those provisions in the shape of additional surcharge can be levied even on a part of the income of a co-operative society engaged in the business of banking, which income is exempt from income-tax and super-tax under sections 81(i)(a) and 99(1)(v) of the Income-tax Act, 1961. Even if the surcharge is but an additional mode or rate for charging income-tax, the Finance Act, 1963, authorises by its terms the levy of additional surcharge on income which is so exempt from income-tax... An exemption granted by the Income-tax Act can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge. Subject to constitutional limitations, additional tax revenue may be collected either by enhancing the rate or by the levy of a fresh charge. Parliament, through the medium of a Finance Act, may as much do the one as the other... It is true that the Income-tax act is permanent Act while the Finance Acts are passed every year and their primary purpose is to prescribe the rates at which the income-tax will be charged under the Income-tax Act. But that does not mean that a new and distinct charge cannot be introduced under the Finance Acts. Exigencies of the financial year determine the scope and nature of its provisions. If Parliament has the legislative competence to introduce a new charge of tax, it may exercise that power either by incorporating that charge in the Income-tax Act or by introducing it in the Finance Act or for the matter of that in any other statute.'
24. If that be so, a fortiori in this case, the special duty of excise is distinct and independent, unlike the additional taxes or super-taxes with reference to the I.T. Act under the relevant Finance Act referred to in the Supreme Court case. Therefore, the special duty of excise cannot be taken into reckoning while assessing the amount of tax credit as referred to under s. 280ZD.
25. There is yet another aspect on which very rightly the learned standing counsel for the Central Govt. laid stress, viz., the words 'levied and collected' as employed in ss. 31 and 39 of respective Finance Acts of 1969 and 1968 which go to establish that the provisions in the Finance Acts are special, distinct and independent in their nature, and merely because a reference is made in order to impose 20 per cent of special duty of excise on the total amount chargeable under the Excises Act, it cannot be particularised as part of the duty of excise. The term 'levy' is wide enough to take in the concept of imposition as well assessment. This is now well settled, and the authority for it is Assistant Collector v. National Tobacco Co. of India Ltd., : 1978(2)ELT416(SC) wherein it is hel :
'The term 'levy' appears to us to be wider in its import than the term 'assessment'. It may include both 'imposition' of a tax as well as assessment. The term 'imposition' is generally used for the levy of a tax or duty by legislative provisions indicating the subject-matter of the tax and the rates at which it has to be taxed. The term 'assessment', on the other hand, is generally used in this country for the actual procedure adopted in fixing the liability to pay a tax on account of particular goods or property or whatever may be the object of the tax in a particular case and determining its amount.'
26. Hence, the words 'levied and collected' occurring in sub-s. (1) of s. 39 as well as in sub-s. (1) of s. 31 of the Finance Acts of 1968 and 1969, respectively, connote a clear conspectus of the duty being special, distinct, different and independent of any other tax or duty, and, therefore, cannot be clubbed with the excise duty leviable under the Excises Act for the purpose of according cash credit relief conceived of under s. 280ZD of the I.T. Act. The learned standing counsel for the Central Government also, referred to s. 80(3) of the Finance Act, 1965, which is in the following term :
'The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excise Act or any other law for the time being in force and such special duties shall be levied for purposes of the Union and the proceeds thereof shall not be distributed among the States.'
27. It was submitted that the provision indicates that the special excise duty is distinct from the duty of excise, as in the case of the former, it cannot be shared by the States, whereas, in the case of the letter, the States also shareit along with the Central Government, and that, therefore, the special excise duty, being a distinct duty, cannot be termed as duty of excise. It is no doubt arguable, but admits of difficulty in accepting as it does not make any difference whether a particular duty or tax is sharable or not or is exclusively meant for the Center or the States. These factors cannot determine the nature or character of the 'duty'.
28. There is, however, another aspect. Under s. 280ZD(6)(b), 'duty of excise' is defined as 'duty of excise leviable under the Central Excises and Salt Act, 1944'. Now, the special duty of excise is not leviable under the Central Excises and Salt Act, as it is leviable under ss. 39 and 31 of the Finance Acts of 1968 and 1969, respectively. Therefore, while quantifying the goods cleared by the assessee for purposes of determining the amount of duty of excise payable to accord a tax credit certificate as contemplated under s. 280ZD, the duty of excise within the meaning of s. 280ZD(6)(b) alone will have to be taken into consideration and not any other duty, much less the special duty of excise laid down by the respective Finance Acts, a that special duty of excise is not leviable under the Excises Act. The mere referential legislation as occurring in ss. 39(b) and 31 of the Finance Acts of 1968 and 1969, respectively, viz., 'a special duty of excise equal to 20 per cent of the total amount so chargeable on such goods', referring thereby to duty so chargeable as referred to under sub-s. (6)(b) of s. 280ZD of the I.T. Act, is only for the purpose of arriving at the rateable duty of 20 per cent under the Finance Act, and, therefore, the argument of the learned counsel for the appellant that it must be deemed to be a duty of excise is not acceptable inasmuch as this special duty of excise is leviable and collectable under the Finance Act and not under the Excise Act.
29. For all these reasons, we are of the view that the special duty of excise is not a duty of excise as contemplated under s. 280ZD of the I.T. Act and, therefore, cannot be taken into account in the matter of granting a tax credit certificate under s. 280ZD.
30. In the result, the judgment under appeal is set aside, the tax credit certificates dated July 7, 1973, and July 13, 1973, issued for the years 1968-69 and 1969-70, respectively, are quashed, and the respondents are now directed to issue tax credit certificates for the years 1968-69 and 1969-70 to the appellant treating each item of item 17 of Schedule I to the Central Excises and Salt Act separately and excluding the shortfall under Item 17(3) thereof, without, however, taking into consideration the special excise duty equal to 20 per cent of the total amount of excise duty so chargeable on such goods. The writ appeal is accordingly allowed in part. No costs.