Judgment

DUTT, J. :- This appeal is directed against the judgment of the Delhi High Court allowing in part only the petition of the appellants under Art. 226 of the Constitution.

2. Appellant 1, J. K. Cotton Spinning and Weaving Mills Limited, has a composite mill wherein it manufactures fabrics of different types. In order to manufacture the said fabrics yarn is obtained at an intermediate stage. The yarn so obtained is further processed in an integrated process in the said composite mill of appellant 1 for weaving the same into fabrics. The appellants do not dispute that the different kinds of fabrics which are manufactured in the mill are liable to payment of excise duty on their removal from the factory. They also do not dispute their liability in respect of yarn which is also removed from the factory. It is the contention of the appellants that no duty of excise can be levied and collected in respect of yarn which is obtained at an intermediate stage and, thereafter, subjected to an integrated process for the manufacture of different fabrics. Indeed, on a writ petition of the appellants, the Delhi High Court by its judgment dated October, 16, 1980 held that yarn obtained and fur