- (1.) This petition concerns the interpretation of an exemption notification issued under the provisions of the Central Excise Rules, 1944 . The notification is dated 30th April, 1975 and reads thus: In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) manufactured in a factory as a job work 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. Explanation.--For the purposes of the 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 job worker to the supplier after the article has undergone the intended manufacturing process on charging only for the job work done by him.
(2.) The petitioners received from M/s. Coates of India Ltd. pigments, oils and toners. They subjected them to a manufacturing process. The rotary news ink which was so manufactured was returned by the petitioners to M/s Coates of India Ltd. The petitioners charged M/s Coates of India Ltd. for the cost of processing the pigments, oils and toners.
(3.) For the period 1st April, 1979 to 6th March, 1981 the petitioners did not avail of the exemption granted by the notification due to ignorance of it and paid full excise duty upon the rotary news ink manufactured by them. They became aware of the notification early in March, 1981. On 7th March, 1981 they filed a classification list with with the excise authorities basing themselves upon the notification. The classification list was not accepted and the petitioners paid full excise duty under protest. On 2nd April, 1981 the Assistant Collector of Central Excise passed an order rejecting their classification list upon the ground that the exemption under the notification "is admissible only where an article is received by the job worker and after manufacturing process the job worker returns that article to the customer which remains the same. In your case the articles sent to you for job work is pigment, oil, toners and the finished product returned by you rotary news ink.";