MADURA COATS LIMITED Vs. SUPERINTENDENT OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS petition is filed for issue ofwrit of mandamusto direct the first respondent to grant the necessary exemption under Notification No. 119/75-C.E., dated 30-4-1975 (hereinafter called the notification) in respect of the fob work done by it for the third respondent.

(2.) IN the affidavit, it is stated that in respect of Tariff Item No. 68 of the Central Excises and Salt Act, 1944 while levying duty, certain exemptions are provided by the notification above referred to and as per notification only job work had been done by the petitioner and no new product having been manufactured by it, quite different from what had been supplied by third respondent, the petitioner is not liable to pay duty under Tariff Item No. 68 as claimed by respondents 1 and 2. First respondent by trade Notice No. 273/77, dated 30-11-1977 claimed that "Fenaplast yarn" produced by twisting different types of duty paid filament and spun yarn material, is assessable to duty under Tariff Item No. 68 of the Act and that the exemption claimed would not be available. By further letter dated 17-3-1978 first respondent again reiterated that as the nylon yarn itself is not returned to the customer but it is twisted with duty paid cotton yarn belonging to the petitioner, and the resultant product returned to the buyer being a new product, the manufacture cannot be considered as a job work within the scope of the explanation to Notification No. 119/75-C.E., dated 30-4-1975, and hence exemption cannot be granted.

(3.) THE petitioner claims as follows: Fenner imports 12' Lea spun nylon yarn and 840 Danier filament nylon yarn from abroad under actual user's licence granted to it and purchases locally 6s cotton yarn. Fenner supplies to the petitioner these three types of yarn namely :- (1) 840 Denier filament nylon yarn, (2) 12s Lea spun nylon yarn, and (3) 6s cotton yarn. For the specific purpose of performing a particular job work, namely, combining the three yarns together so as to make the three types of yarn into a single yarn, namely 6/2/4 yarn. THE three types of materials which Fenner supplies are the absolute property of Fenner the third respondent. For the conversion effected Rs. 7 .02 per kilogram is charged and third respondent also required combining of 840 denier filament nylon yarn into 6 plies of the same type of filament yarn and this job is also carried out by petitioner for which the petitioner charges a sum of Rs. 9/- per kilogram.