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Issues:
Interpretation of item 26AA in the First Schedule of the Central Excise and Salt Act, 1944 regarding excise duty on goods manufactured by a partnership firm. Analysis: 1. The petitioner, a partnership firm manufacturing agricultural implements and hand-tools, was issued a notice demanding excise duty based on item 26AA of the Act, amended by the Finance (No. 2) Act, 1962. The petitioner contended that their goods did not fall under item 26AA and were not liable to duty. 2. The main contention was whether the goods manufactured by the petitioner fell within item 26AA. The petitioner argued that their goods were not iron or steel products and did not fall under the specific sub-item (ia) mentioned in item 26AA as claimed by the Revenue. 3. The petitioner relied on a decision of the Mysore High Court to support their contention that goods made from iron or steel products that had already been manufactured did not fall under item 26AA. The court agreed with this interpretation, stating that the products listed in item 26AA were those first manufactured from raw materials, not products made from already manufactured iron or steel. 4. The court then analyzed whether agricultural implements could be categorized under sub-item (ia) of item 26AA, which referred to "all other rolled, forged or extruded shapes and sections not otherwise specified." The court agreed with the interpretation that 'shapes and sections' did not include agricultural implements or hand-tools, and therefore, the goods did not fall under this sub-item. 5. Consequently, the court held that the demand for excise duty on the petitioner's goods was not authorized by law. The writ petition was allowed, and the demands were quashed, declaring the petitioner not liable to excise duty on the manufactured goods. No costs were awarded in this case.
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