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Issues Involved:
1. Whether nylon or rayon warpsheets are 'goods' within the meaning of Entry 68 of the First Schedule to the Central Excises and Salt Act, 1944. 2. Whether the respondent company is entitled to exemption of excise duty as a 'job work' under the Notification dated April 30, 1975. 3. Maintainability of the Writ petition in light of alternative remedies. Summary: Issue 1: Whether nylon or rayon warpsheets are 'goods' within the meaning of Entry 68 of the First Schedule to the Central Excises and Salt Act, 1944. The High Court examined whether the nylon or rayon warpsheets constituted 'goods' under Entry 68. The Court noted that for an article to be considered 'goods', it must be something that can ordinarily come to the market to be bought and sold and is known to the market. It must undergo such a transformation that a new and different article emerges with a distinctive name, character, or use. The Court observed that the nylon yarns in the warpsheets had not undergone any change and were merely arranged lengthwise. The Court concluded that the nylon or rayon warpsheets did not constitute a new article and thus were not 'goods' within the meaning of Entry 68. Issue 2: Whether the respondent company is entitled to exemption of excise duty as a 'job work' under the Notification dated April 30, 1975. The Court considered the alternative contention that even if the warpsheets fell under Entry 68, they would be exempt from excise duty as 'job work' under the Notification dated April 30, 1975. The Notification defined 'job work' as work where an article intended to undergo a manufacturing process is supplied to the job worker and returned after the process, with charges only for the job work. The Court found that the respondent company prepared warpsheets with nylon or rayon yarns supplied by its customers and returned them after preparation, charging only for the job work. The Court accepted the respondent's explanation that the cotton yarn used was incidental and constituted only 0.6% of the warpsheet. Thus, the work done by the respondent qualified as 'job work', entitling them to the exemption. Issue 3: Maintainability of the Writ petition in light of alternative remedies. The appellants argued that the Writ petition was premature and not maintainable due to the availability of alternative remedies. The Court rejected this contention, noting that the excise authorities had no jurisdiction to impose duty on an exempted article. The Court also found that the alternative remedy of applying for a refund was not adequate, as it would require the respondent to continually pay the duty and seek refunds, leading to no final determination. Therefore, the Writ petition was maintainable. Conclusion: The appeal was dismissed, and the judgment of the learned single Judge making the Rule NISI absolute was upheld. The Court held that the nylon or rayon warpsheets were not 'goods' under Entry 68 and that the respondent was entitled to exemption as 'job work'. The Writ petition was deemed maintainable despite the availability of alternative remedies.
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