Judgment

KULDIP SINGH, J. Special leave granted.

2. The question for consideration in this appeal is whether printed cartons manufactured by the appellant-company are "products of the Printing Industry" and as such, are exempt from payment of duty of excise under Exemption Notification No. 55/75 dated 1-3-1975 as amended from time to time. The question was answered by a learned Single Judge of the Karnataka High Court in the affirmative and the writ petition filed by the appellant under Articles 226/227 of the Constitution of India was allowed. Writ appeal filed by the Union of India against the judgment of the learned Single Judge was allowed by the judgment dated 16-11-1990 by the Division Bench of the High Court and the judgment of the learned Single Judge was set aside and the writ petition of the appellant before the High Court was dismissed. This appeal by way of special leave is against the judgment of the Division Bench of the High Court.

3. The appellant-company manufactures printed cartons at its factory. According to the appellant, over a period of time, it has manufactured diverse printed cartons, for organisations like Brooke Bond India Limited, Lipton India Company Limited and Tata Finlay Limited etc. The Company has specialised in that branch of the Printing Industry which is connected with the manufacture of printed cartons.

4. In exercise of the powers under Rule 8 of the Central Excise Rules, 1944, Union of India issued Notification No. 55/75 dated 1-3-1975 exempting certain specified goods falling under Item 68 of the First Schedule to the Central Excises and Salt Act, 1944 (the Act) from the whole of the duty of excise. The notification was amended from time to time. Amongst the goods specified are the following:

"All products of Printing Industry including newspapers and printed periodicals."

The appellant claimed that printed cartons are a product of the Printing Industry and, as such, exempt from duty under the notification.

5. The appellant filed a classification list dated 26-10-1979 wherein it claimed the benefit of the exemption under the notification in respect of the printed cartons manufactured by it. Classification list was approved by the Assistant Collector of Central Excise. The appellant thereafter manufactured and cleared the printed cartons without payment of excise duty. However, the Superintendent of Central Excise by the letter dated 15-9-1980 informed the appellant that on reconsideration it was found that printed cartons were not eligible for exemption under the notification as they were a product of the Packaging Industry. The appellant was asked to file a fresh classification list in respect of printed cartons and to clear the same on payment of excise duty. The appellant filed a fresh classification list dated 1-11-1980 and has been paying excise duty on the printed cartons thereafter. The Superintendent of Central Excise issued notices dated 24-9-1980 calling upon the appellant to show cause why the amount mentioned in the said notices be not recovered from the appellant as duty of excise for the period when they cleared the printed cartons without payment of duty. It was stated in the show-cause notices that printed cartons were not a product of the Printing Industry and hence the company had erroneously claimed the exemption under the notification and cleared printed cartons without paying duty. The appellant challenged the notices by way of a writ petition before the Karnataka High Court. As mentioned above, a learned Single Judge allowed the writ petition but on appeal a Division Bench of the High Court reversed the judgment of the learned Single Judge and dismissed the writ petition filed by the appellant-company.

6. According to the appellant-company printed cartons are known and understood in the trade as products of the Printing Industry. The dominant activity in the manufacture of a printed carton is the printing activity and the cutting, creasing and gluing, if any, are only supp