TMI Blog1980 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... to hold the nylon or rayon yarns in position. A given length of warpsheet will have 99.4% of nylon yarns and 9.8% of cotton yarns. No manufacturing process involved in making warpsheets and no new commodity known to commerce or industry comes into being when yarns are arranged or assembled to form warpsheets. A warpsheet continues to be known as yarns commercially and in industry even after the arrangement mentioned above. The nylon or rayon yarns in the warpsheets are used by the respondent's customers in the manufacture of motor car tyres, and it is convenient in such manufacture to have the yarns arranged or assembled in the form of a warpsheet. The cotton yarns holding the nylon or rayon together are destroyed in the manufacture of tyres and are not necessary for such manufacture, their only use or function being to hold the arrangement or assemblage of nylon or rayon yarns together. 3. The Collector of Central Excise by his memo dated March 24, 1975 addressed to the respondent had taken the view that a nylon or rayon warpsheet is an item of manufacture by itself and as it does not come under any of the Tariff Entries Nos. 1 to 66 of the First Schedule to the Central Excises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule was made absolute. Being aggrieved by the judgment of the learned Judge, this appeal has been preferred by the Central Excise Authorities. 6. It is not disputed that the tyrecord warpsheets were not chargeable to excise duty. On March 1, 1975 the Tariff Entry 68 was introduced into the First Schedule of the Central Excises and Salt Act, 1944. Under that Entry, all other goods not elsewhere specified in the Schedule, manufactured in a factory, became liable to excise duty at the rate of 1% ad valorem. The word 'goods' has not been defined in the Act. The Supreme Court has interpreted the meaning of the word 'goods', and it has been held that to become 'goods' an article must be something which can ordinarily come to the market to be bought and sold and is known to the market. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use [See Union of India and Another v. Delhi Cloth and General Mills Co. Ltd.- AIR 1963 S.C. 791 = 1977 E.L.T. (J 199) and South Bihar Sugar Mills and another v. Union of India, - A.I.R. 1968 S.C. 922 = 1978 E.L.T. (J 336)]. The question, therefore, is whether the tyrecord warpsheets ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are arranged in the shape of a warpsheet for the convenience of being used in the manufacture of tyrecord. We are, therefore of the opinion that the nylon or rayon warpsheets are not 'goods' within the meaning of Entry 68. 8. There is an alternative contention of the respondent company. It is contended that even assuming that nylon or rayon warpsheets come under Entry 68, the respondent company is entitled to the exemption of excise duty as a 'job work' in accordance with the Notification dated April 30, 1975 of the Ministry of Finance, Government of India. Under that Notification, goods falling under Entry 68 of the First Schedule to the Central Excises and Salt Act, 1944, manufactured in a factory as a job work are exempted, from so much of the duty of excise leviable thereon as is in excess of the duty calculated on the basis of the amount charged for the job work. 'Job work' has been defined in the explanation to the notification as follows :- "Explanation. - For the purpose of this notification the expression 'Job work' shall mean such items of work where an article intended to undergo manufacturing process is supplied to the job worker and that article is returned by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l only be entitled to charge for the job work which necessarily means that he will not be entitled to any other consideration. If a manufacturing process involves job work as also sale of certain article, or in other words, if the contract is one of labour and sale, it will not be a job work. But the article supplied and sold by the job worker must constitute a substantial part of the manufacturing process and not merely used incidentally. 9. In paragraph 2 of the Writ Petition, it has been categorically stated that a given length of warpsheet will have 99.4% of nylon or rayon and 0.6% of cotton. There was some dispute as to the percentage of cotton threads in the warpsheet. Samples of nylon and rayon warpsheets given by the respondent company to the appellants for chemical examination. The report of the Chemical Examiner is that the samples are in the form of loosely woven white materials in which weft threads are just sufficient to hold the warp ends. The same of nylon warpsheets contain 83.7% by weight of Polyamide and the sample of rayon warpsheet 83.6% by weight of viscose. The report of the Chemical Examiner has been explained by the respondent company in paragraph 6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomers, but it has only charged for the works done by it in preparing the warpsheets. After considering the above facts, we are of the view that even assuming that the nylon or rayon warpsheets come within Entry 68 as 'goods not elsewhere specified' in the First Schedule it will be a job work' and the respondent company will be entitled to the exemption as granted by the said notification. We have, however, held that the nylon or rayon warpsheets do not come under Entry 68. The appellants are, therefore, not entitled to impose excise duty on the respondent company for the warpsheets. 11. Before we part with this appeal, we have to dispose of some technical points raised by Mr. Sen, learned Counsel for the appellants. It is contended by him that the Writ petition is premature inasmuch as the respondent company has only been asked to show cause why it should not pay excise duty on the warpsheets, under Entry 68. It is for the excise authorities to consider the cause that may be shown by the respondent company and not this Court at this stage. It is also submitted by him that the Writ petition is not maintainable as there is no question of jurisdiction involved in the Case. The exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be accepted. 13. Another point has been urged on behalf of the appellants against the maintainability of the Writ petition on the ground of alternative remedy. It is pointed out that the respondent company made an application for refund of the excise duty paid by it under protest. That application was rejected and thereafter an appeal was preferred by the respondent company and during the pendency of the said appeal, the Writ petition was filed in this Court. It is contended that the respondent Company having availed itself of an alternative remedy is debarred from moving this Court under Article 226 of the Constitution. Mr. Jinwalla, learned Counsel for the respondent Company, submit that every year the respondent company has to pay the duty on warpsheets under protest and also to make an application for refund. After the application is rejected, the respondent Company has to file an appeal. Even if the appeal succeeds, that will not prevent the excise authorities from charging excise duty on warpsheets and so there will be no final determination of the matter. The relief that the Respondent Company may get in respect of a particular year, is not an effective and adequate r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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