' RAJA FAYYAZ AHMED, J.-- This appeal by leave of the Court is directed against the judgment, dated 21-10-2003 passed by the learned Division Bench of the Lahore High Court, Lahore accepting Civil Appeal No,8 of 2002 filed by respondent No,1 under section 36-C of the Central Excise Act, 1944 against the judgment, dated 15-2-2001 of the Customs, Excise and Sales Tax Appellate Tribunal, Lahore.
2. The respondent is a well-known member of chain of hotels by the name of Holiday Inn Hotel, Multan which is centrally air-conditioned; rendering various services and functions, including matrimonial gatherings etc. Vide order dated 13-6-2000 Additional Collector, Multan directed respondent No,1 to pay Central Excise Duty amounting to Rs,6,68,232.85 besides additional duty under section 3-B of Central Excise Act, 1944 calculated at the principal amount so long as it remained unpaid as well as; an amount of Rs,50,000 was imposed by way of penalty on respondent No,1. On the inspection of the records of the respondent by Central Excise Staff, Multan, it was found that during the period from June, 1996 to June, 1997 they had paid Central Excise Duty leviable on various functions at the rate of 12-1/2% instead of 20% and thus, they short paid a sum of Rs,6,68,232.85. Accordingly, show-cause notice for such amount was issued to the respondent hotel, which demand was contested by the said respondent and eventually respondent No,2 passed the order, dated 13-6-2000 abovementioned; impugned before the Appellate Tribunal by respondent No,1 through Appeal No,684/LB of 2000. The Additional Collector, Customs and Excise, Multan/respondent No,2 passed an order for the recovery of above said amount as Central Excise duty from respondent No,1 and further, the Superintendent, Central Excise, Multan was directed to calculate the amount of additional duty under section 3-B of the Central Excise Act, 1944 and for violation of the provisions of Central Excise Act, 1944 a penalty of Rs,50,000 was also imposed under Rule 210 of the Central Excise Act, 1944. The learned Appellate Tribunal vide judgment impugned before the learned High Court, by party allowing the appeal of respondent No,1 held that as there was no mala fide on the part of respondent No,1, it could not be burdened with the liability of paying the additional duty and penalty in the circumstances accordingly, the same were waived.
Operating part of the judgment passed by the learned Appellate Tribunal is reproduced hereinbelow:--- "In the legislative instruments the word "and" is some time used as conjunctive and some time disjunctive depending upon the intention of the Legislature to meet a particular situation. In the instant case in our opinion the word "and" used PCT Heading 9801.1030 in disjunctive and there was no intention on the part of framers of PCT to included other formalized social gathering such as reception, sent off, meetings etc. Which have no connection or nexus with the marriage ceremonies to include them in such ceremonies add verbosity to a clear phase unnecessarily.
Thus, the marriage ceremonies which include all the religious and civil rituals (mentioned more precisely .In section 2 of the said Ordinance), are separate functions from other functions not connected with marriage functions and PCT Heading 9801.1030 covers both kinds of functions.
Therefore, we hold that all those functions which have no connection with any marriage ceremony are also chargeable under PCT Heading 9801.1030 at the rate of 20 per cent and the amount demanded from the appellants has to be paid by them to the Department.
' However, since there was no mala fide on the part of the appellants in amounting to pay the said amount they cannot be burdened with the liability of paying additional duty and penalty which are waived. Only to this extent the appeal is accepted and the impugned order is modified."
3. The learned counsel appearing for the parties have been heard in the light of the impugned judgment gone through carefully with their assistance besides the relevant S.R.O.456(I)/96, dated 13-6-1996 and the provisions as contained therein relating to Heading Nos.9801.1010 and 9801.1030.
The learned counsel for the appellant supporting the judgment passed by the learned Appellate Tribunal contended that the "functions" such as receptions, sends off, meetings with lunches, dinners and similar on the formal or informal social gatherings, other than marriage ceremonies are chargeable under PCT Heading 9801.1030 and not under 9801.1010. To further supplement his view-point, according to the learned counsel the word used in former heading "and" is not conjunctive rather; disjunctive which has not been correctly interpreted in the impugned judgment and thus, the "functions" other than the marriage ceremonies are chargeable at the rate of 20% under PCT Heading 9801.1030, therefore, according to the learned counsel the impugned judgment passed by the Appellate Tribunal was unexceptionable.
4. The learned Advocate Supreme Court appearing for respondent No,1 contended that marriage ceremonies and the functions connected and allied thereto excluding all other functions fall under the PCT Heading 9801.1030 whereas; the functions not related to or in any way connected to "marriage ceremonies" including any function not related thereto are subject to levy of duty under PCT Heading 9801.1010 as evident from the contents of this Heading. According to the learned counsel, the words "and function" denote conjunctive character of these words relating to "matrimonial ceremonies" and were it otherwise there was no sense in enacting PCT Heading 9801.1010 chargeable to excise duty at the rate of 12-1/2% of the charges for "services" other than those specified in Sub-Heading Nos.9801.1020 and 9801.1030.
5. The arguments put forth on behalf of the parties have been considered in the light of the impugned judgment and the Notification No,S.R.O.456(I)/96, dated 13-6-1996, perused carefully with the assistance of the learned counsel for the parties. The judgment passed by the Appellate Tribunal and the order passed by the Additional Collector, Multan have also been carefully perused in the light of the provisions of the relevant PCT Headings, as contained in the above said Notification, which are reproduced hereinbelow for better understanding:---
(1) (2) (3)
9801.1010Services other than those specified in Sub-Heading No,9801.1020 and 9801.1030, provided or rendered by hotels, any portion of which or any restaurant of which is air- conditioned on any day during a financial year, or which provides cabaret or any other floor show on any day during a financial year or which provides alcoholic drinks.Twelve and half per cent of the charge 9801.1020Services provided or tendered by hotels located in (Northern Areas.
Federally Administered Tribal Areas), Murree Tehsil, Sehwan Sharif Taluka, Hazara Division, coastal areas of Hawksbay and Sandspit and other coastal areas except those falling under Karachi Division, daily room rent of any room whereof including with or without service charges on account of breakfast or heating or air-conditioning, exceeds Rs,450 on any day during the financial year, or which provides cabaret or any other floor show on any day during the financial year or which provides alcoholic drinks.Six per cent of the charges 9801.1030Services for parties relating to matrimonial ceremonies and functions, provided or Rendered by hotel, other than hotels of 9801.1020, the daily room rent of any room or apartment of which with or without service charges and charges on account of breakfast or air- conditioning exceeds Rs,1,000 on any day during the financial year."Twenty per cent of the charges ' Before referring to the contents of PCT Heading 9801.1010, it seems proper and convenient to take into consideration the provisions of Heading 9801.1030. This relates to the services that may be rendered by hotel relating to "matrimonial ceremonies and functions" other than by a hotel covered by PCT Heading 9801.1020 which shall be subject to levy of Central Excise Duty at the rate of 20% of the charges. The words "matrimonial ceremonies and functions" used under PCT Heading 9801.1030 on plain reading unambiguously indicate that the words "and functions" have not been applied in the said provision independent of matrimonial ceremonies rather; these co-relate with the matrimonial ceremonies to be read in conjunction, inter se, as well spelt out clearly from the contents of PCT Heading 9801.1010 by which the "services" other than those specified in Sub- Headings 9801.1020 and 9801.1030 even made chargeable to Central Excise Duty at the rate of 12- 1/2% (Twelve and half per cent) of the charges. The services provided or rendered by a hotel specified in PCT Headings 9801.1010 and 9801.1020 do cover all functions other than those relating to or connected to the matrimonial ceremonies else at least, there was no wisdom in enacting PCT Heading 9801.1010 and the word "services" used in the above said PCT Heading embrace and cover all sorts of services rendered by a hotel subject to payment of Central Excise Duty at the specified rates relating to meetings, gatherings, seminars, social and formal and informal gatherings, lunches and dinners etc., arranged at such occasions besides cultural shows privately or officially arranged in such a hotel could conveniently be said to be a "function" chargeable at the specified rates for the services rendered by the hotel other than those functions connected and related to the matrimonial ceremonies which are chargeable at the rate of 20% of the charges inclusive of the ceremonies such as; Nikah, Rukhsati, Valima, Rasm-e-Hina; undoubtedly are known and called as functions relatable to marriage ceremonies and similarly in case a relative or a family friend of spouses if arranges a lunch or dinner or any other like functions to welcome, and honour a newly wed couple be a function chargeable under PCT Heading 9801.1030 at the specified rate i,e, 20% of the charges whereas; all other functions not related to the "matrimonial ceremonies" would also be termed and can be conveniently said to be a function chargeable for services rendered by the hotel at the given rates under the relevant PCT Heading. The word "function" has not been defined under Central Excise Tax Act or the Rules made thereunder nor so given in the Notification in question, therefore, the same has to be interpreted and understood in its ordinary meaning and; reasonably in the sense in which it has been used in the relevant PCT Heading referred to above by supplying ordinary meaning to such word which convey reasonable sense and interpretation. Also, keeping in view of the percentage of the charges the manifest wisdom appears to be that the functions related to the matrimonial ceremonies are chargeable at a high rate of duty for the services rendered for such functions which obviously exclude ordinary functions chargeable at the less percentage of duty. The interpretation made by the learned High Court of the word "function" used in PCT Heading 9801.1030 is in accord with the rules of interpretation of statutes by applying the principle of "ejusdum generis" and therefore, no exception could be taken thereto.
6. Thus, for the foregoing reasons this civil appeal being without any merit is dismissed. There shall be no order as to costs.