S. B. MAJMUDAR, J. ( 1 ) IN this group of petitions under Art. 226 of the Constitution the petitioners have brought in challenge the action of the Authorities functioning under the provisions of the Central Excises and Salt Act 1944 (the Act for short) refusing benefit of the exemption Notification No. 175 of 1986 CE dated 1-3-1986 to the concerned petitioners. They have also brought in challenge the show cause notices issued to them under Sec. 11a of Act and have further challenged consequential orders confirming the demands contained in the impugned show cause notices. The petitioners have also challenged the vires of paras 2 and 3 of the exemption Notification No. 175 of 1986 dated 1-3-1986 as amended by Notification No. 223 of 1937 dated 22-9-1987. ( 2 ) AS these petitions involve common questions of law and facts they were beard together and are being disposed of by this common judgment. Introductory facts: Before highlighting the nature of controversy posed for our consideration in this group of petitions it is necessary to note a few relevant facts. All these petitioners are engaged in manufacturing patent and propritery medicines falling under Chapter 13 of the First Schedule to the Central Excise Tariff Act 1985 All of them have got necessary Small Scale Industry Registration numbers and licence in Form L-IV under the Act for the purpose of manufacturing Patent and Proprietary medicines (PP medicines for short ). ( 3 ) IT is the case of the petitioners that in their factories PP medicines are also being manufactured by these persons who do not have their own facilities to manufacture the same. They therefore hire shift or shifts at the petitioners factories for manufacturing under their own control and supervision and out of their own raw material PP medicines. Those persons who hire such shift or shifts are known as loan licensees who are given these licence under the provisions of Drugs and Cosmetics Act 1940 read with Drugs and Cosmetics Rules 1945 The petitioners contend that such practice is prevalent on large scale in pharmaceutical industry. That this practice helps these who are small manufacturers and who have no capacity or financial strength to have their own factories for manufacturing their own goods. Such loan licensees are therefore permitted to get their PP medicines manufactured at the shifts hired at factories owned by persons like the petitioners. That this practice helps these who are small manufacturers and who have no capacity or financial strength to have their own factories for manufacturing their own goods. Such loan licensees are therefore permitted to get their PP medicines manufactured at the shifts hired at factories owned by persons like the petitioners. Such type of practice is permitted and contemplated under Rules 69a and 74b of the Drugs and Cosmetics Rules 1945 The petitioners case is that when such loan licensees manufacture their own PP medicines at the factory premises of the petitioners by hiring necessary shifts at their factories the manufacturers of the concerned PP medicines sro those loan licensees and not the petitioners. In exercise of the powers of exemption under Rule 8 of the Central Excise Rules the Central Government issued exemption Notification No. 175 of 1986 CE dated 1-3-1986 whereunder exemption was granted to get clearance of the specified goods upto value of Rs. 16 lakhs and concession rate of subsequent clearance in case of manufacturers having clearance not exceeding Rs. 1 crore 50 lakhs in the preceding year. The petitioners contend that under the scheme of this notification they were entitled to clear their own manufactured PP medicines from their own story premises which are SSI units by availing of concession regarding payment of excise duties as contemplated by sub-paras (a) and (b) of para 1 of the exemption Notification. That so for as PP medicines manufactured by loan licensees at the petitioners factories are concerned according to the petitioners these loan licensees are also entitled to exemption and payment of concessional rate of excise as per the aforesaid sub-paras of para 1 of the Notification. However according to the petitioners excise authorities are wrongly denying the benefit of this exemption Notification to loan licensees who manufacture their goods as aforesaid at the petitioners factories ant on the contrary by wrongly applying sub-paras (2) and (3) of the exemption Notification they are clubbing the goods manufactured by the petitioners with the goods manufactured by loan licensees at the petitioners factories and accordingly slab of cleared goods for the purpose of exemption from payment of excise duty is wrongly indited and on that wrong basics the impugned show cause notices are issued to the petitioners which are liable to the quashed. The petitioners also challenge the vires of paras (2) and (3) of exemption Notification No. 175 of 1986 on the ground that they are ultra vires provisions of the Act and they are also ultra vires Art. 14 of the Constitution. ( 4 ) IN view of the rival catenations of the learned Advocates of the parties on merits the following points arise for our consideration:1 Whether the loan licensee governed by the provisions of Drugs and Cosmetics Act 1940 read with Drugs and Cosmetics Rules 1945 getting his goods manufactured under his control supervision and direction and out of his own raw material is manufacturer within the meaning of Sec. 2 (f) of the Central Excises and Salt Act ?2 Whether paras (2) and (3) of the general exemption Notification No. 175 of 1986 dated 1-3-1986 read with letter Notification No. 223 of 1957 dated 22-9-1981 are ultra vires the Central Excises and Salt Act 1944 and also ultra vires Art. 14 of the Constitution ?3 Whether the loan licensees referred to in point No. 1 are entitled to the benefit of general exemption Notification No. 175 of 1986 dated 1-3-1986 as amended by Notification No. 223 of 1987 dated 22 and if yes to what extent ? ( 5 ) POINT No. 1 : In order to appreciate the nature of activities of loan licensees it would be profitable to turn to the provisions of Drugs and Cosmetics Act 1940 read with Rules framed thereunder. The Act has been enacted with a view to regulating the import manufacture distribution and sale of drugs and cosmetics. Section 3 of the said Act is definition section. The term cosmetic is defined in clause (aaa) of Sec. 3. It means any article intended to be rubbed poured sprinkled or sprayed on or introduced into or otherwise applied to the human body or any part thereof for cleansing beautifying promoting attractiveness or altering the appearance while clause (b) defines the term drug to include all medicines for internal or external use of human beings or animals. The term manufacture is defined under clause (f) to mean in relation to any drug or classing any process or part of a process for making or altering ornamenting finishing packing labelling breaking up or otherwise treating or adopting any drug or cosmetic with a view to its sole distributions. The term manufacture is defined under clause (f) to mean in relation to any drug or classing any process or part of a process for making or altering ornamenting finishing packing labelling breaking up or otherwise treating or adopting any drug or cosmetic with a view to its sole distributions. Similarly patent or proprietary medicine has been defined by clause (b ). It includes a drug which is a remedy or prescription presented in a form ready for internal or external administration of human beings or animals. It is not in dispute that the petitioners as well as loan licensees are manufacturing patent and proprietary medicines known as PP medicines. Chapter IV deals with manufacture sale and distribution of drugs and cosmetics and lays down the standards and qualities of drugs and cosmetics covered by the said Act. Section 18 provides that from such date as may be fixed by the State Government by notification in the animals gazette in this behalf no person shall himself or by any other person on his behalf manufacture for sale or for distribution or sell for stock or exhibit or offer for sale or distribute any drug which is not of a standard quality or is misbranded adulterated or spurious or which are mentioned as prohibited drugs and cosmetics in that section. Section 33 confers power on the Central Government to make rule for the purpose of giving effect to the provisions of Chapter IV. Similarly under Sec. 33n power is conferred on the Central Government to make rules for the purpose of Chapter IV-A. When we turn to the rules farmed by the Central Government called Drugs and Cosmetics Rules 1945 we find the genesis of the loan licensees in Rule 69a. The said Rule provides that applications for the grant or renewal of loan licensees for the manufacture for sale or for distribution of drugs other than those specified in Schedules C C (1) and XI shall be made in Form 24-A to licensing authority and shall he accompanied by a fee of Rs. 200. 00. Explanation (1) to the said Rule provides that for the purpose of this rule a loan licence means a licence which a licensing authority may issue to an applicant who does not have his own arrangement for manufacture but who intends to avail himself of the manufacturing facilities owned by licensee in Form 25. 200. 00. Explanation (1) to the said Rule provides that for the purpose of this rule a loan licence means a licence which a licensing authority may issue to an applicant who does not have his own arrangement for manufacture but who intends to avail himself of the manufacturing facilities owned by licensee in Form 25. Explanation (2) lays down that the licensing authority shall before the granting a loan licence satisfy himself that the manufacturing unit has adequate equipment. . staff capacity for manufacture and facilities for testing to undertaken manufacture on behalf of the applicant for a loan licencee. Rule 70-A provides that loan licences of manufacture for sale or distribution of drugs other than those specified in Schedules C C (1) and XI shall be issued in Form 25-A. Rules 73 and 73a provide for certificate of renewal and certificate of a renewal of loan licence. It is therefore obvious that as per the aforesaid Act and the Rules system of loan licensing is accepted by the legislature in the field of manufacture of drugs and cosmetics and PP medicines. Those manufacturers who do not have their own facilities to manufacture these goods can get loan licensee entitling them to utilise infrastructures belonging to somebody else whereat they can manufacture their goods. ( 6 ) THE question is whether such loan licensees who are entitled to manufacture these goods under the provisions of the aforesaid Act and the Rules can be treated to be manufacturers under the Central Excises and Salt Act 1944 if they get their goods manufactured at factories of others. So far as this aspect is concerned reference to relevant provisions of the Excise Act and the Rules will be appropriate. Section 2 (f) of the Excise Act defines the term manufacture to include any process as mentioned in clauses (i) and ( of the definition and further recites that the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods but also any person who engages in their production or manufacture on his own account. The second part of the definition covers all those who engage in production of excisable goods or manufacture on their own account may be at any place. The second part of the definition covers all those who engage in production of excisable goods or manufacture on their own account may be at any place. Place of manufacture is not relevant for deciding as to whether the concerned persons who undertake this activity can he treated to be manufacturers or not. In this connection reference to Rules 174 174 of the Excise Rules also becomes relevant. Rule 174 occurs in Chapter VIII dealing with licensing. It lays down that every manufacturer trader or person hereinafter mentioned shall be required to taken out a licence and shall not conduct his business in regard to such goods otherwise than by the authority and subject to the terms and conditions of a licence granted by a duly authorised officer in the proper form. When we turn to Rule 174a it provides that notwithstanding anything herein before contained if the Central Government is satisfied that it is necessary or expedient in the public interest so to do it may by notification in the official gazette and subject to such conditions or limitations as it may specify in such notification exempt from the operation of Rule 174 (b) any class of manufacturers who get their goods manufactured on their account from other person or persons. The aforesaid procedure clearly postulates that for the purpose of the Excise Act and the Rules there can be a manufacturer who gets his goods manufactured on his own account from other person or persons meaning thereby utilising infrastructure of others. It is therefore obvious that such loan licensees who are entitled to manufacture PP medicines and who are having relevant licence under the Durgs and Cosmetics Act read with relevant Rules can utilise factory premises of other persons where they can get their goods manufactured under their own control and supervision and if they manufacture excisable goods they would be treated as manufacturers within the meaning of the Exercise Act and the Rules. The learned Advocates for the petitioners in this connection invited our attention to a Division Bench judgment of this Court in the case of Jamnadas v. C L. Nangia AIR 1965 Gujarat 215: ( 1965 GLR 137 ) interpreting the term manufacture as laid down by Sec. 2 (f) of the Act. The learned Advocates for the petitioners in this connection invited our attention to a Division Bench judgment of this Court in the case of Jamnadas v. C L. Nangia AIR 1965 Gujarat 215: ( 1965 GLR 137 ) interpreting the term manufacture as laid down by Sec. 2 (f) of the Act. The Division Bench consisting of J. M. Shelat C. J. and A. R. Bakshi J. was concerned with the question whether the petitioners before them who were manufacturing cotton fabrics through Ankleshwer Handloom Weavers Co-operative Purchaser Society can be said to be manufacturers within the meaning of Sec. 2 (f) of the Act. Answering this question In affirmative the Division Bench made the following pertinent observations:"section 2 (f) (ii) lays down that a manufacturer shall include not only one who employs hired labour but also one who engages in the production or manufacture etc. The words not only suggest that a person who employs hired labour would be included in the first category If that was not so and the legislature wanted to classify persons employing hired labour separately It should not have used the expression Dot No but would instead have used a simple conjunctive and The words not only used in that juxtaposition indicate that the draftaman thought that those who employed hired labour were covered by the first category and then the draftsman proceeded to lay down the inclusive part of the definition by emphasising that not only but also those who engaged in the production etc. would be manufacturer It is possible for a person who himself toes not employ labour but gets goods manufactured through an independent contractor to say that he was not the manufacture for he had not brought into existance an article or a product in question either himself or through his servants to cover such a class of persons the legislature provided the inclusive part of the definition which would include a Person who does not himself employ labour but engages himself in the production or manufacture of goods through an independent contractor". There are various other Judgments of different High Courts and the Supreme Court interpreting provisions of Sec. 2 (f) of the Act on the same lines. We do not deem it fit to burden this judgment by referring to them. There are various other Judgments of different High Courts and the Supreme Court interpreting provisions of Sec. 2 (f) of the Act on the same lines. We do not deem it fit to burden this judgment by referring to them. In view of the aforesaid settled legal position and in the light of the provisions of the Central Excise Act and the Rules it must be held that the loan licensees are also manufacturers within the meaning of the term as envisaged by the said Act and the Rules and especially when they get their goods manufactured under their own control or supervision and out of their own raw material at the factory premises belonging to some one else and which premises they might have hired for the time being shiftwise or otherwise. The first point for determination therefor has to be answered in the affirmative. We may mention at this state that the learned Standing Counsel for the respondents was not in a position to point out any provision in the Central Excise Act and the Rules which contraindicated the said position. We answer point No. 1 accordingly. ( 7 ) POINT No. 2 : In order to appreciate the nature of the grievance cantering round the impugned para of the notification it is necessary to keep In view the background in which this notification carne to be issued. The said notification is at Annexure C to Special Civil Application No. 1435 of 1988 and it also annexed to other petitions. This notification is issued by the Central Government in exercise of the power under Rule 8 (1) of the Control Exercise Rules. Under the said Rule the Central Government is empowered to from time to time by notification in the official gazette exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of duty leviable on such goods. It is obvious that under charging Sec. 3 once excisable goods are manufactured by a manufacturer they attract duty as prescribed in the Schedules Inspite of the charging section being attracted qua concerned excisable goods they can be given benefit of partial or full remission of duty by the Central Government. In exercise of that power the said notification has come to be issued. In exercise of that power the said notification has come to be issued. The preamble of the notification states exemption to first clearances of specified goods upto the value of rupees fifteen lakes and concessional duty on subsequent clearances in the case of manufacturer having clearances not exceeding rupees one and behalf crores in the preceding year. Thus the exemption hid down under the scheme of the relevant notification attaches to the first clearances of specifided goods upto the value of Rs. 15 lakhs and subsequent clearances not exceeding 1. 5 crores of rupees by a given factory. Para 1 of the Notification makes it clear that the Central Government exempts the excisable goods of the description specified in the Anuexure to the Notification and falling under the Schedule to the Central Excise Tariff Act 1985 being specified goods and cleared for home consumption on or after the 14 in any financial year by 8 manufacturer from one or more factories to the extend provided in clauses (B) ant (b) of the first pars. In the cue of first clearances of the specified goods upto an aggregate value not exceeding Rs. 30 lakhs in a case where taxes are not paid on inputs used in the manufacturer of the specified goods whole of duty leviable on specified goods upto aggregate value not exceeding Rs. 30 lakhs in exempted. Sub-clause (b) of the first para provides that in the case of clearances of the specified pods of an aggregate value not exceeding Rs. 60 lakhs immediately following the said clearances of the value specified in clause (a) concessional rate of duty is prescribed. Proviso to para 1 days down that the aggregate value of clearances of the specified goods in terms of clauses (a) and (b) of this paragraph taken together shall not exceed Rs. 75 lakhs. Thus benefit of exemption is made available to small factories at which goods are manufactured upto the quantities laid down in para 1 of the exemption notification Now follow paras 2 and 3 which are impugned by the learned Counsel for the petitioners. They provide that the aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year under clauses (a) and (b) of para 1 shall not exceed Rs. 30 lakhs and Rs. 60 lakhs respectively. They provide that the aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year under clauses (a) and (b) of para 1 shall not exceed Rs. 30 lakhs and Rs. 60 lakhs respectively. There is a proviso to para 2 which lays down that the aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year in terms of clause (a) and clause (b) of para 1 taken together shall not exceed Rs. 75 lakhs. Para 3 provides that nothing contained in this notification shall apply if the aggregate value of clearances of all excisable goods for home consumption (a) by a manufacturer from one or more factories or (b) from any factory by one or manufacturers had exceeded Rs. 150 lakhs in the preceding year. Thus paras 2 and 3 bring about the concept of clubbing of manufactured goods for the purpose of earning exemption qua their clearances from a given factory. To illustrate working of these two paras read with para 1 we may take example of a Manufacturer A owning a factory whose first clearance from that factory amounts to Rs. 30 lakhs. Then as para (a) (ii) he will get total exemption of excise duty qua these specified goods cleared upto limit of Rs. 30 lakhs. But if in the very same factory someother manufacturer B on hiring factory shiftwise or otherwise manufactures his own goods under his supervision and control and out of his own raw material and first clearance value of Bs manufactured goods exceeds Rs. 30 lakhs then but for para 2 both A and B would be entitled as per para 1 to claim individual exemption on their respective first clearances of goods manufactured by them in the factory to the extent of Rs. 30 lakhs each. But because of concept of clubbing brought in by para 2 the goods manufactured from the very same factory by A and B will be clubbed and their first clearances of the respective goods would amount to Rs. 60 lakhs i. e. Rs. 30 lakhs each. Consequently exemption from excise duty will be available upto total value of Rs. 30 lakhs only and the rest will attract duty. Similarly clubbing of further clearances of these manufacturers from the same factory would attract ceiling of Rs. 60 lakhs i. e. Rs. 30 lakhs each. Consequently exemption from excise duty will be available upto total value of Rs. 30 lakhs only and the rest will attract duty. Similarly clubbing of further clearances of these manufacturers from the same factory would attract ceiling of Rs. 60 lakhs and would not entitle them to have concessional duty on their respective additional clearances upto Rs. 60 lakhs each. Even for the last year eligibility criterion for the same factory being aggregate value of clearance of the excisable goods for home consumption at the rate of 150lakhs of rupees would apply conjointly if more than one manufacturers like A and B manufacture from the same factory. ( 8 ) IT is submitted by the learned Advocate for the petitioners than this is illegal and arbitrary in both ways. Firstly clauses 2 and 3 cut across clause 1 and hence they are contradictory to one another and therefore clauses 2 and 3 must make room for operation of parent para 1. Secondly it was submitted that in any case artificial classification has been made by the rule making authority between the sole manufacturers who manufacture their goods at the factory which is SSI unit on the one hand and other class of manufacturers who manufacture their own goods in such factory and also permit other manufacturers to manufacture latters goods in the same factory by utilising their infrastructures. That would include persons like loan-licensees. That if the solo manufacturers manufacture their goods in the factory their first clearances and subsequent clearances as provided by para 1 will get exempted from payment of duty but only because they permit other manufacturers to utilise their plant and machinery the rule making authority has evolved the principle of clubbing their manufactured goods and therefore the extent of exemption available to individual manufacturer gets whittled down or curtailed. There is no rational basis underlying such differential treatment to plurality of manufacturers utilising the same factory in given financial year for manufacturing their goods and therefore such classification evolved by clauses 2 and 3 is arbitrary and ultra vires Art. 14 of the Constitution. Reliance was placed by the learned Counsel for the petitioners on the Supreme Court decision in the case of Govt. of India v. Dhanlaxmi Paper Mill 1989 ELT 171 . Reliance was placed by the learned Counsel for the petitioners on the Supreme Court decision in the case of Govt. of India v. Dhanlaxmi Paper Mill 1989 ELT 171 . Exemption notification issued in that case under Rule 8 (1) was brought in challenge on the ground that clause (a) of third proviso thereof providing for an earlier date as cut off date for restricting benefit of exemption was without any basis arbitrary and ultra vires. Considering the scheme of that notification the Supreme Court held that choice of date as cut off date for restricting benefit of exemption was arbitrary and ultra vires if such date has no rational relation to the object of notification. There cannot be any dispute on this well settled position. However we have to see whether the impugned clauses 2 and 3 introducing the system of clubbing the manufactured goods by different manufacturers from the same factory is in any way arbitrary or ultra vires. So far as the first aspect of the matter is true that para I lays down general scheme of exemption upto a particular limit of first clearance of specified goods of the same SSI Unit and then lays down concessional rate of duty beyond basic clearances upto the ceiling provided therein. But that does not mean that this is an absolute provision. It has to be read conjointly with paras 2 and 3. There is nothing like parent provision as wrongly assumed by the learned Counsel for the petitioners. This is an exemption notification and exemption can be granted by Central Govt. in certain cases subject to conditions which may be laid downwn in the notification. In the present case absolute exemption has not been granted by the Central Govt. but a hedged in concessional scheme of exemption has been promulgated. Thus paras 2 and 3 have to be read as further conditions of exemption without limiting absolute exemption given in para 1. Therefore paras 1 2 and 3 have to be read together in a conjoint manner and once they are so read there would not be any question of para 1 being cut across by paras 2 and 3 or latter getting ultra vires the so called parent provision of para 1. Consequently there is no substance in the first contention of the learned Counsel for the petitioners on this aspect. Consequently there is no substance in the first contention of the learned Counsel for the petitioners on this aspect. ( 9 ) FAR as infraction of Art. 14 is concerned we fail to appreciate how it can be said that wordings of notification in question with paras 2 and 3 lay down any scheme of hostile discrimination against plurality of manufacturers manufacturing their goods from the same SSI unit. The preamble of the notification and the relevant clauses of the notification say down a clear cut scheme of exemption-cum-concession. All the factories which are SSI units are uniformly covered by the sweep of the said notification and the exemption attaches to the clearances of the specified goods cleared from the factory gate of such factory in a given financial year and to extent of total exemption is upto Rs. 30 lakhs and concessional exemption is beyond 30 lakhs upto Rs. 60 lakhs with limit of Rs. 75 lakhs in a given financial year. This is the basis or heart of the notification. If one manufacturer manufactures specified goods in one financial year alone from that factory and gets the said goods cleared he gets full exemption and concession to the extent provided by para 1. But if more than one manufacturers utilise the said factory and infrastructures during the financial year and got their goods cleared through the factory gate in the same year then their goods will be clubbed for the purpose of deciding the question of total exemption upto the limit prescribed and concessional exemption upto further limit prescribed. The common thread which runs through all the paras of the notification is the scheme of exemption and concessional duty in connection with total quantity of first clearances and subsequent clearances of specified goods ex-factory gate during the financial year. Once this common thread is kept in view then paras 2 and 3 will fall in line with para 1. If paras 2 and 3 are not countenanced unexpected and unwarranted result would follow. From the same factory gate; goods manufactured by manufacture A in a financial year will get total exemption upto Rs. 30 lakhs as per para 1 and manufacturer B who also utilise the infrastructure at some other time during the same financial year will get total benefit of Rs. 30 lakhs by way of first clearance of his own goods. From the same factory gate; goods manufactured by manufacture A in a financial year will get total exemption upto Rs. 30 lakhs as per para 1 and manufacturer B who also utilise the infrastructure at some other time during the same financial year will get total benefit of Rs. 30 lakhs by way of first clearance of his own goods. Thus total exemption limit would stand inflated to Rs. 60 lakhs instead of Rs. 30 lakhs which is the total limit of full exemption notification so far as first clearances of concerned goods from the given factory for the financial year go. With a view to avoiding this unexpected and uncontemplated result the aforesaid system of clubbing envisaged by paras 2 and 3 has been brought in. It works as 8 safety valve for avoiding such unexpected result and ensures that from the same factory permissible extent of total goods by way of first clearances as contemplated by notification are allowed to be cleared without payment of duty and thereafter subsequent total clearances of specified goods from the same factory in the same year would earn concessional rate of duty. Thus paras 2 ant 3 instead of being arbitrary and irrational awe in full consonance with the scheme of exemption envisaged by the notification in question and but for them the nature of exemption would be rendered arbitrary and lopsided. Under these circumstances it is not possible to agree with the submission of the learned Counsel for the petitioners that impugned para 2 and 3 of the Notification are ultra vires Art. 14 or that they hostilely discriminate against the plurality of manufacturers manufacturing from the same factory. The second point therefore fails and stands rejected. ( 10 ) POINT No. 3: Once it ill held that the entire notification operates of its own and all the paras have to be given their proper effect the next question that arises is as to whether the loan licensees are covered by the sweep of that notification. The authority viz. The second point therefore fails and stands rejected. ( 10 ) POINT No. 3: Once it ill held that the entire notification operates of its own and all the paras have to be given their proper effect the next question that arises is as to whether the loan licensees are covered by the sweep of that notification. The authority viz. Assistant Collector has taken the view that though loan licensees are manufacturers as per the provisions of Central Excise Act and the Rules for the purpose of that notification they cannot be treated to be manufacturers because of Explanation IV and para 7 of the said notification which have been inserted in Notification No. 175 of 1986 by latter Notification No. 223 of 1987. This conclusion of the competent authority is seriously challenged by the learned Counsel for the petitioners. We have already seen while considering point No. 1 that loan licensees who do not have their own factory are also manufacturers within the scheme of the Excise Act and the Rules Once they are held to be manufacturers there is no reason why for the purpose of exemption notification issued under Rule 8 they would get excluded Ipso facto from its sweep and become non-manufacturers as assumed by the competent authority. Now so far as para 7 is concerned all that it provides is that the exemption contained in this notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification. We are not concerned with the proviso to para 7. So far as Explanation IV to the notification is concerned all that it says is that for the purpose of this notification where the specified goods manufactured by a manufacturer are affixed with a brand name or trade name (registered or not) of another manufacturer or trade such specified goods shall not merely by reason of that fact be deemed to have been manufactured by such other manufacturer or trader. We fail to appreciate how the aforesaid provisions exclude loan licensees from the sweep of the said notification. We fail to appreciate how the aforesaid provisions exclude loan licensees from the sweep of the said notification. So far as para 7 is concerned it would not apply to a case where loan licensee who brings his own raw material to SSI factory and gets his goods manufactured by hiring shift of this factory through his own labour or hired labour but under his own supervision and who affixes his own marks of brand name or trade name for the simple reason that para 7 would apply to Q case where one manufacturer affixes on specified goods manufactured by him with brand name or trade name of somebody else. The case of the petitioners is that loan licensees who manufacture their own goods from their own raw material under their own supervision by hiring shift or shifts in the factory during the financial year are independent manufacturers of their own goods and only the factory premises being common it cannot be said that owner of the factory is manufacturing these goods. But the loan licensees who have hired the shifts manufacture their own goods and affix their own marks. Consequently it cannot be said that the factory owner is branding the goods manufactured by him with the trade name of somebody else. Thus on the facts alleged by the petitioners operation of para 7 is ruled out. There is considerable substances in the aforesaid contention of the learned Advocates for the petitioners. On the assumption that what they say is factually correct we have to decide whether para 7 would apply to such cases. For the purpose of this discussion we will assume that loan licensees are genuine loan licensees who manufacture their own goods from their own raw material by their own labour or hired labour under their own supervision in SSI factory and for that purpose they take on lease or hire the shift therein during the given financial year. Such loan licensees are affixing their own marks on their own goods. Therefore there is no question of such loan licensees affixing the specified goods with the brand name of somebody else. We must therefore hold that if these facts are established as pleaded by the petitioners then para 7 will be out of picture. We will accordingly consider this para 7 in the light of the assumed facts. Therefore there is no question of such loan licensees affixing the specified goods with the brand name of somebody else. We must therefore hold that if these facts are established as pleaded by the petitioners then para 7 will be out of picture. We will accordingly consider this para 7 in the light of the assumed facts. Whether these facts are true or not will have to be decided by the competent authority. But if such facts are established then of course para 7 will be out of picture as loan licensees are manufacturers of their specified goods and not the factory owner. But even in the alternative it is contended by the petitioners that oven assuming that factory owner can be said to be manufacturer of goods of loan licensees and that he is branding the goods with the trade name of loan licensees even then para 7 will not hit them as another person viz. LOAN licensee cannot be said to be ineligible for exemption under the said notification. For that purpose reliance is placed on para 4 of the notification by the learned Advocates for the petitioners. When we turn to para 4 of the notification we find an extra condition that the notification shall be applicable only to a factory which is an undertaking registered with the Director of industries in any State or the Development Commissioner (Small Scale Industries) as a Small Scale Industry under the provisions of the Industries (Development and Regulations) Act 1951 However there are two provisos (a) and (b) which say that nothing contained in this paragraph shall be applicable: (a) in a case where the value of clearances from a factory during the preceding financial year or in the current financial year did not exceed or is not likely to exceed rupees seven and a half lakhs or (b) in a case where a manufacturer who is manufacturing specified goods in a factory other than a factory which is registered under the Industries (Development and Regulations) Act 1951 with the Director General of Technical Development in the Ministry of Industry has been availing of the exemption under this notification or any of the notifications mentioned therein during the preceding year. Now a mere look at para 4 shows that exemption granted under the notification is confined to those factories which are registered as small scale units with the Director of Industries. It is not in dispute that the petitioners factories are all SSI units so registered. Thus if a loan licensee manufactures his goods in such factory which is registered with the Director of Industries in the State as SSI unit he can certainly get benefit of the notification and he will not be left out So far as provisos are concerned they furnish scheme of exemption to the provisions of main para 4 meaning thereby that in cases covered by provisos (a) and (b) even though factory at which the goods are manufactured in a given financial year may not have been registered as SSI unit exemption benefit of the notification will be available and to that extent main provision of para 4 will stand whittled down or superseded. It is well settled that proviso to any statutory instrument carves out a field of its own from the operation of the parent provision and to that extent it is usually treated as exception to the main provision though in exceptional cases it may be treated as separate provisions of its own So far as pars 4 is concerned the main thrust thereof is that if the goods are manufactured in a factory which is not registered as SSI unit scheme of exemption under the notification will not be available to cover those pods meaning thereby goods must be cleared from the factory which is a SSI unit. To this provision there are exceptions as envisaged by provisos (a) and (b) The first exception is in cases where goods cleared from any factory during the preceding financial year or current financial year do not exceed Rs. 7. To this provision there are exceptions as envisaged by provisos (a) and (b) The first exception is in cases where goods cleared from any factory during the preceding financial year or current financial year do not exceed Rs. 7. 5 lakhs then these goods will be covered by the benefit of exemption notification even though the factory where they are manufactured may not have been registered as SSI unit Second exception is that if the manufacturer has manufactured his goods in a factory which is other than factory which is registered as medium scale factory under the Industries (Development and Regulations) Act 1951 with the Directorate General of Technical Development in the Ministry of Industry and has availed of benefit of the present notification or earlier notifications of exemption during the preceding financial year then such manufacturer will also get benefit of the present notification in the current year. We fail to appreciate how this para 4 would disentitle loan licensees from the benefit of exemption notification. There is lot of substance in the contention of the learned Counsel for the petitioners that if loan licensee manufactures his goods in a factory which is registered as SSI unit because of the main provision of para 4 read with para 1 exemption will be available to the goods manufactured by such loan licensee from such factory subject to the concept of clubbing envisaged by paras 2 and 3. But even if such loan licensees in past have manufactured goods from a factory which was not medium scale or large scale factory and had availed of benefit of the present notification or earlier exemption notifications listed at (i) to (xii) in proviso (b) of para 4 such loan licensees are also entitled to the benefit of the exemption so far as their goods manufactured at such factory are concerned. Mr. Dave for the loan licensees submitted that even if a new loan license who establishes his business in the current year and hence had not availed of this or earlier exemption notifications listed at items (i) to (xii) and proviso (b) to para 4 if he manufactured his goods at a factory during the current year which is SSI unit main sweep of para 4 can cover the goods manufactured by such loan licensee. We find considerable substance in the aforesaid contention of Mr. We find considerable substance in the aforesaid contention of Mr. Dave appearing for loan licensees in Special Civil Application No. 1435 of 1988 It therefore appears clear to us that if a loan licensee manufactures his own goods during the financial year in a factory which is SSI unit he cannot be told off the gate and cannot be treated as one not eligible for benefit of exemption notification even though he might not have availed of benefit of exemption notification in past. But even apart from that those loan licensees who might have manufactured their goods in past from the factories which are not registered as medium scale or largo scale industry then such loan licensees who have availed to benefit of exemption notifications listed at items (i) to (xii) of para 4 would also be entitled to the benefit of exemption notification for the current year and they cannot be said to be ineligible for the benefit of exemption notification for the year in question. Under these circumstances therefore even alternative contention of the learned Counsel for the petitioners for non-applicability of para 7 has to be accepted i. e. even though assuming that small scale factory owner has manufactured goods of loan licensees and has affixed the brand name or trade name of loan licensees being other person para 7 will not apply as these other persons loan licensees will not be ineligible for grant of exemption under the notification as none of paras preceding para 7 would make them so ineligible and para 4 will also not make them ineligible as discussed earlier. For all these reasons para 7 will not apply to the specified goods manufactured by loan licensees in the factories which are SSI units and which are leased by them on shift basis or otherwise for that purpose. Reliance placed on Explanation IV by the competent authority to deny benefit of this exemption notification to loan licensees is also uncalled for as all that Explanation IV says is that where a manufacturer who manufactured specified goods and affixed them either brand name or trade name of the manufacturers or traders merely because of such branding it cannot be said that a person to whom this trade name or brand name belongs will be deemed to be manufacturer of such goods. This explanation postulates that manufacturing must have been done by the factory owner and he might have affixed the manufactured goods with the trade name of another. As we have seen above on the facts as pleaded by the petitioners and on the assumption that they are true the factory owners are not manufacturing the goods of loan licensees nor are they affixing trade name or brand name of loan licensees and hence Explanation IV main part will not apply to such cases. Even that apart even on the assumption that the factory owner has manufactured all these goods and he has affixed trade name of another i. e. loan licensee on these goods even then all that Explanation IV does is to raise a negative presumption that only because of that it cannot be said that loan licensee is the manufacturer. A mere presumption would arise as per the Explanation which is not an irrebutable presumption. It can be rebutted on proper evidence led before the authority. Thus Explanation IV merely raises a presumption but it does not lay down any substantive provision excluding operation of the notification qua loan licensees and consequently even on that ground. Explanation IV would not come in the way of genuine loan licensees who are manufacturing goods at SSI factory under their supervision and control for getting benefit of the exemption notification. It must therefore be hold that loan licensees who are referred to in point No. 1 are entitled to the benefit of general exemption Notification No. 175 of 1986 as amended by latter Notification No. 223 of 1987. Extent of benefit will of course be subject to the operation of paras 2 and 3 and subject to clubbing of their manufactured goods with the goods of factory owners during the current year and the loan licensees cannot have best of both the words meaning thereby that they cannot insist that they should get benefit of para I but would not be subjected to conditions of paras 2 and 3. Point No. 3 is accordingly answered in the affirmative to the extent indicated above. (Rest of the Judgment is not material for the Reports.) Petitions allowed. .