Judgment

AMARENDRA NATH SEN, J. :- The question for consideration in this appeal by Special Leave is whether the plywood manufactured by the Respondent and utilised by the respondent in manufacturing plywood circles to be used as component parts of packing material for wire and cables is exigible to excise duty under the Central Excises and Salt Act, 1944.

2. The respondent is a manufacturer of plywood circles to be used as component parts of packing materials for wire and cables. The Respondent used to be assessed to duty under the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) on the basis of the total area of the circles manufactured and the duty used to be collected when the circles were issued out of the factory premises. On 13-2-1967 an audit objection was taken to this mode of assessment of excise duty on the ground that the process of cutting out circles and punching of holes cannot be considered as incidental or ancillary to the completion of the manufacture of plywood. The audit objection pointed out that the levy of excise duty must be on the total area of blocks or panels of plywood that came out of the press and not on the area of the circles mad