Judgment

BALAKRISHNA ERADI, J. :- In these three appeals the parties involved are the same and the point arising for determination is identical. Hence they were heard together and are being disposed of by this judgment.

2. The Bata Shoe Company Ltd. (hereinafter called the Company) is an existing company within the meaning of The Companies Act, 1956; with its head office at No. 30, Shakespeare Sarani, Calcutta 17. The company is engaged in the business of manufacturing and dealing in articles of footwear and accessories. For the purposes of the said business, the company has three manufacturing establishments namely, a factory at Batanagar in the district of 24-Parganas, West Bengal, another factory at Bataganj near Patna in the State of Bihar and a third manufacturing establishment at Faridabad in the State of Haryana. By virtue of Entry 36 of the First Schedule in the Central Excises and Salt Act, 1944 (hereinafter called the Act), footwear and parts thereof in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power is chargeable to excise duty, the rate of duty being ten per cent ad valorem in respect of footwear and fifteen per cent ad valorem in respect of parts of footwear.

3. By a Notification G.S.R. 360, dated Feb. 28, 1965 issued by the Central Government in exercise of the powers conferred by sub-rule (1) of R. 8 of the Central Excise Rules, 1944 for short "the Rules" footwear and parts thereof were completely exempted from levy of excise duty. However, shortly thereafter, by another Notification dated May 26, 1967, the exemption from duty granted in respect of footwear and parts thereof by the preceding Notification dated Feb. 28, 1965 was withdrawn. Thereafter followed yet another Notification dated July 24, 1967 which was in the following terms :-

"NOTIFICATION

CENTRAL EXCISES

G.S.R. In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts, with effect from the 26th May, 1967, footwear falling under Item No. 36 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) of which the value does not exceed Rs. 5.00 per pair, from the whole of the duty of excise leviable thereon.

(No. 171/67)"

The sole question raised in these appeals concerns the interpretation. of this Notification.

4. During the years 1967 and 1968, the company was manufacturing certain items of footwear of which the wholesale price was Rs. 6.25 per pair. The company contended that since the assessable value of such items of footwear calculated in accordance with the provisions of S. 4 of the Act, as they stood at the relevant time was only Rs. 4.94 and hence less than Rs. 5 per pair, such items qualified for exemption from duty under the Notification dated July 24, 1967. Though originally the Department appears to have been inclined to accept the correctness of the stand taken by the company, later on they changed their stand and informed the company that the articles of footwear manufactured by it, of which the wholesale price was Rs. 6.25 per pain were chargeable to excise duly since while computing the "value" of the articles for the purpose of judging the applicability of the exemption, the duty element of the cost structure could not be deducted from the wholseale price and on such calculation the value of such footwear Would exceed, Rs. 5 per pair.

5. The company took up the matter with the respective Collectors of Central Excise it. West Bengal, Bihar and Haryana but without success. In the meantime the Department continued to levy and collected from the company substantial amounts by way of duty on such articles of footwear. The Company, therefore, instituted separate Writ Petitions .in the High. Courts of Calcutta, Patna and Punjab and Haryana. The Patna High Court allowed the Writ Petition of the company and upheld its contention that the articles of footwear in question were not exigible to duty since they f