Judgement

RANGANATH MISRA, J.:- The fate of this appeal under S. 35(L), Central Excises and Salt Act, 1944, depends upon the meaning and scope of the Explanation appearing in S. 11 A of the Act.

2. The High Court of Karnataka by its order dated 4-6-1976 in Writ Petition No. 2632 of 1976 gave the following direction :

"Pending disposal of the aforesaid Writ Petition, it is ordered by this Court that collection of excise duty as a fabric be and the same is hereby stayed. It is further ordered that the petitioner shall however continue to pay excise duty as yarn and shall further maintain an account in square metres for future clearance."

The said writ petition was ultimately dismissed by the High Court on 16-2-1981. The operative part of the Courts final order ran thus :

"For the reasons aforesaid, we make the following order :-

(i) Rule discharged;

(ii) We decline to interfere at this stage leaving open to the petitioner to urge all the contentions in reply to the show cause notices."

3. On 20th May, 1982, a notice to show cause was issued to the appellant by the Assistant Collector, being Notice No. 913, and with this the Collector sought to raise a demand for the period from 20th June. 19