MODI CARPETS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The only prayer that survives for consideration pertains to the taxability of the material called "sliver" obtained as an inprocess material in the manufacture of semi-worsted carpet yarn, in the factory of the petitioner company; the action taken by the Revenue to levy excise duty on this material under the provisions of the Central Excise and Salt Act, 1944 (the 'Act') is under challenge. At the time of filing the writ petition, validity of a few statutory provisions was raised, but, these provisions have been upheld in other cases.

(2.) The basic question is whether this material referred as 'Sliver' is of a transient character which comes into existence during the manufacture of the semi worsted carpet yarn; in other words, whether this inprocess material, captively consumed, has actually an individual identity having a market, so that it can be considered as 'goods' to attract the levy of excise duty.

(3.) The petitioner-company in para 2 of the writ petition averred thus:-