That was why the State Government applied to the High Court for quashing the demand and for setting aside the appellate order of the Collector and the revisional order of the Central Government.
until the pre excise stock held by the factory on April 24, 1962, was utilised and companyverted into forged implements and was cleared from the factory.
The Central Government traversed the claim of the State Government on the ground that as the rods and bars, which were held in stock by the States Implements Factory, were pre excise stock, and as they were put to further process by forging them into shovels, spades and other agricultural implements, they became liable to duty .
It was company tended that the demand was justified because the aforesaid iron and steel products, out of which the agricultural implements were manufactured, had number borne any excise duty at all.
It was also urged that the peti tion was number maintainable in the High Court as it raised a dispute between the Government of India and the State Gov ernment within the meaning of article 131 of the Constitu tion.
A revision was taken to the Central Government under the provisions of the Act, but it was also dismissed.
Appeal by Special Leave from the Judgment and Order dated 4/5 9 67 of the Mysore High Court in W.P. No.
An appeal was preferred to the Collector of Central Excise against the demand, but without success.
The Assistant Collector of Central .Excise explained in his letter dated June 19, 1962, that the agricultural implements which were manufactured in the States Implements Factory fell within the purview of item 26AA as they were forged or extruded during the process of manufacturing the agricultural implements.
The precise claim of the Excise authorities was that the duty became payable on those articles by virtue of the newly inserted item 26AA because the aforesaid stock of iron and steel products was used for the manufacture of agricul tural implements like mamties, pickaxes, sledge hammers, shovels and ploughs.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
P. Raman, Addl.
R. Datar and N. Nettar, for the Respondent.
S.K. Mehta and Girish Chandra for the Appellant.
The High Court was moved by the State of Mysore under article 226 of the Constitution for quashing the demand numberice dated July 21, 1962 issued by the Inspector of Central Excise for the payment of Rs.
1695 of 1968.
Genl.,
The demand was made with reference to the newly inserted item 26AA in the First Schedule to the Central Excises and Salt Act, 1944, hereinafter referred to as the Act.
2,465.91 as excise duty on the products despatched by the States Implements Factory.
The Judgment of the Court was delivered by SHINGHAL, J. This appeal by special leave is directed against the judgment of the High Court of Mysore dated September 4/5, 1967.
That item was added to the Schedule by the Finance Act of 1962, and it was claimed by the Central Excise Department that, on the date of the amendment, the State Government was in possession of some stock of iron and steel products, namely, flats, squares and rods in its factory, which had been obtained from their manufacturers when they were number excisable arti cles.
1416/65.
