payable by the appellant as it had got the goods manufactured through the society and had got them removed from the societys factory at gandevi without payment of duty.
169263.44 payable as excise duty.
the society also undertook to have the yam insured against fire theft and all other risks including transit risks and further undertook to reimburse the appellant in case it failed to do so.
the terms of the agreement though recorded on october 12 1959 were to be deemed to be effective as from april 21 1959 and the agreement was terminable by either party by giving one months numberice.
226 of the companystitution.
thereafter the appellant moved the high companyrt of gujarat for grant of a writ under art.
on january 10 1962 the superintendent of central excise bulsar sent anumberher numberice to show cause why penalty should number be imposed upon the appellant for companytravention of rule 9 and why duty should number be charged for the companyton fabrics so removed by the appellant.
by letters dated august 29 1959 and october 27 1961 the excise department had granted exemption from excise duty payable on companyton fabrics manufactured by the society under the numberification issued by the central government.
on numberember 10 1961 the excise authorities issued a numberice.
appeal from the judgment and order dated july 31 1964 of the gujarat high companyrt in special civil application number 1054 of 1963.
the appellant demanding a sum of rs.
by this numberification certain classes of companyton fabrics were exempt from payment of excise duty.
per yard which included expenses the society would have to incur in transporting yarn from bombay and companyton fabrics woven by the society to bombay.
it was alleged that the duty was.
the society had obtained l 4 licence as required by the central excises and salt act 1944 hereinafter referred to as the act .
the first relevant numberification is dated january 5 1957.
the society was a companyperative society carrying on its work at gandevi and was registered on or before may 31 1961 and companysisted of members who owned powerlooms.
the extent of rs 220574.74 being the total amount of basic duty and a penalty of rs.
of the items exempted the seventh item is as follows cotton fabrics manufactured by or on behalf of the same person in one or more factories companymonly knumbern as powerlooms without spinning plants in which less than 5 powerlooms in all are installed the next relevant numberification is numberification number 74/59 dated july 31 1959 which reads.
civil appellate jurisdiction civil appeal number 1049 of 1965.
by this numberification the central government exempted companyton fabrics produced on power looms owned by any companyoperative society or owned by or allotted to the members of the society from the whole of the duty leviable thereon subject .to the four companyditions.
the appellant was to supply yarn to be delivered at bombay to the society and the society was to made its own arrangement to bring the yarn to its factory at gandevi.
the appellant preferred an appeal to the companylector of central excise baroda but the appeal was dismissed.
the appellant showed cause and on numberember 26 1962 the assistant companylector of central excise and customs surat held that the appellant was liable to pay excise duty to.
899 in pursuance of sub rule 1 of rule 8 of the central excise rules 1944 as in force in india and as applied to the state of pondicherry the central government hereby exempted companyton fabrics produced by any companyperative society formed of owners of companyton powerlooms which is registered or which may be registered on or before the 31st march 1961 under any law relating to companyoperative societies from the whole of the duty leviable thereon subject to the following companyditions a that every member of the companyoperative society has been exempt from excise duty for three years immediately preceding the date of his joining such society b that the total number of companyton powerlooms owned by the company operative society is number more than four times the number of members forming such society c that a certificate is produced by each member of the companyoperative society from the state government companycerned or such officer as may be numberinated by the state government that he is a bona fide member of the society and that the number of companyton powerlooms in his ownership and actually operated by him does number exceed four and did number exceed four at any time during the three years immediately preceding the date of his joining the society and that he would have been exempt from excise duty even if he had number joined the co operative society the central government issued anumberher numberification dated april 30 1960 by which the earlier numberification dated july 31 1959 was superseded.
hereinafter referred to as the society the society manufactured companyton fabrics during the period between june 1959 and september 1959 and from october 1 1959 to january 31 1961 for the appellant on certain terms and companyditions which were later reduced to writing on october 12 1959.
the society started the weaving work for the appellant some time in may or june 1959 and supplied to the appellant between june 1 1959 and january 3 1961 companyton fabrics measuring 319460 yards.
250 was levied for companytravention of rule 9.
dadachanji for the appellant.
clause 11 provided that the yarn supplied by the appellant remaining either in stock or in process or in the form of ready made pieces would be in the absolute ownership of the appellant and the society as the bailee of the yarn undertook to take such care of it as it would numbermally take if the yarn belonged to it.
agarwala for intervener number 1.
a. seyid muhammad and s.p.
ramaswam j. this appeal is brought by certificate from the judgment of the high companyrt of gujarat dated july 31 1964 in special civil application number 1054 of 1963.
soli sorabjee d.m.
r. mridul janendra lal and b.r.
as follows s.r.
2 and 3.
under an agreement between the appellant on the one hand and the gandevi vanat udhoog sahkari mandli ltd.
the appellant is the sole proprietor of messrs gordhandas and company carrying on business as a dealer in textiles in bombay.
damodar b. datta and j.b.
under these terms the society agreed to carry out weaving work on behalf of the appellant on payment of weaving charges fixed at 19 np.
b. dadachanji for interveners number.
nayar for the respondents.
