JUDGMENT

K.N. SAIKIA, J.:—The State of U. P. by special leave appeals from the judgment of the High Court of Allahabad dated 26-10-19791 allowing the respondents writ petition and holding that the State of U. P. and the Excise authorities were not entitled to levy excise duty on the wastage of liquor in transit. The respondents are manufacturers of high strength spirit classified as other sorts of spirit not otherwise specified under S. 28 of the United Provinces Excise Act, 1910, hereinafter referred to as the Act.After manufacture they transport those spirits in big containers from the distilleries to their warehouses, transporting them on passes issued under S. 16 of the Act. In the bonded warehouses the same are sometimes diluted, separately bottled and sold. They also used to manufacture and bottle military rum under a licence and supply the same to the defence personnel inside and outside the State of U. P. The Officer Commanding Rail Head Depot A,S.C., Pathankot having obtained permits from the State of Punjab for the import of litary rum, against those permits the respondents exported military rum from their distillery, under different passes. The excise duty on military ru