- (1.) This appeal is preferred by the Union of India against the judgment of the Patna High Court allowing the Writ Petition filed by the respondent herein Bata India Ltd. The Writ Petition was filed by the respondent questioning the notice of demand served upon it by the Central Excise Authorities to pay the duty specified therein.
(2.) The respondent is a renowned manufacturer of footwear in India. It has got its own factories at various places in the country. According to its case, it was also purchasing the footwear manufactured by certain small manufacturers and selling them under its own brand 'Jalsa' and 'Bata'. Respondents 4 to 7 in the writ petition (respondent Nos. 2 to 5 in this appeal) are such small manufacturers.
(3.) Under Rule 8 of the Central Excise Rules, the Central Government issued a Notification being Notification No.93/67 dated. 26th May, 1967 exempting certain small manufacturers of footwear from the payment of duty. The said Notification was amended by Notification No. 103/ 76 dated 16th March, 1976. These notifications did not affect the respondent. However, on 9th May, 1977, the Central Government issued another Notification (No. 88/77) in supersession of the earlier notifications, which reads as follows : "NOTIFICATION GENERAL EXCISES G.S.R.- In exercise of the powers conferred by sub-rule(l) of R. 8 of the Central Excise Rules, 1944. and in supersession of the Notification of the Government of India in the Department of Revenue and Banking No. 103/76 Central Excise dated the 16th March, 1976 the Central government hereby exempts footwear falling under sub-item(l) of Item No. 36 of the First Schedule to the Central Excises and Salt Act, 1944(1 of 1944). From the whole of the duty of excise leviable thereon: Provided that: (i) such footwear is produced by or on behalf of a manufacturer in one or more factories, including the precincts thereof, wherein not more than 49 workers are working, or were working on any day of the preceding 12 months; and (ii) the total equivalent of power used in the manufacture of such footwear by or on behalf of a manufacturer in one or more factories does not exceed two Horse Power. Explanation: Where footwear, manufactured by a manufacturer, is affixed with the brand or trade name, registered or not, of another manufacturer or is purchased by another manufacturer, it shall be deemed to have been manufactured by or on behalf of such other manufacturer.";