Suhas Chandra Sen, J. - (1.) The petitioner No. 1, Trot Shoe Company Private Limited, carries on business of manufacturing footwear at its factory situated at No. 19/4A, Munshigunj Road, Calcutta. On the goods manufactured by the petitioner company, Central Excise Duty at all material items was levied under Tariff Item No. 36 of the First Schedule to the Central Excises and Salt Act, 1944. In order to manufacture shoes, the petitioner company buys Cotton fabric in fully manufactured condition from the market. The manufacturers of cotton fabric have to pay excise duty as and when they manufacture cotton fabric. The case of the petitioners is that the cotton fabric is a marketable commodity and they buy this commodity from the market which has already borne excise duty. For the purpose of manufacturing footwear, cotton fabric is used by the petitioner in a special manner. Rubber solution is pasted on the one side of the fabric. Such rubber solution is prepared by mixing, inter alia, natural rubber with fillers accelerators and solvent oil. Two such sheets of pasted fabric are then pressed together so as to make the same thick enough for being used to make the 'upper' for manufacture of shoes. At this stage, the said semi-processed material is sticky and has got adhesive properties. The 'uppers' thus prepared has to be immediately used for manufacture of shoes because the tackiness and the adhesive properties of the 'upper' is of very limited duration. Imediately after the two sheets of pasted fabrics are pressed together so that the same is thick enough for being used as 'uppers' the pasted fabric is immediately cut into different sizes for stiching of the complete 'uppers'. These 'uppers' are soft and shapeless. The 'uppers' are thereafter lasted on not aluminium lasts. Thereafter, 'the 'uppers' are put on the soles and the entrie materials are then directly vulcanised for manufacturing shoes.
(2.) The case of the petitioners is that the manufacturing of shoes is one continuous process beginning with pasting of rubber solution on one side of the fabric and ending with vulcanisation to form the shoes.
(3.) The case of the Excise Department is that the pasting of rubber solution on the cotton fabric amounts to manufacture of rubberised cotton fabrics, which is an independent excisable item. Since the petitioner company not only produces shoes but also produces rubberised cotton fabric, excise duty is leviable on rubberised cotton fabric regardless of the fact that this fabric may be used ultimately for the purpose of manufacture of shoes which admittedly is an excisable item.;