Judgment

JUDGMENT :- We have heard Sri Ganguly, learned senior counsel for the appellant and Shri Soli J. Sorabjee, learned Senior Counsel for the respondent. Special Leave granted.

2. Appellant, Union of India, prefers this appeal against the order dated 26th July, 1991, of the High Court of Judicature at Bombay in Writ Petition No. 2102 of 1983 upholding the respondents contention that the process of backing duty paid aluminium foil with paper, plain or printed, resulting in the preparation of "paper-backed aluminium-foil" did not amount to manufacture of a new and commercially distinct article. By this writ petition respondent sought to restrain the appellant from levying and collecting duty on "paper-backed-aluminium-foil" in respect of its transactions for the period between February, 1980 and August, 1983.

3. The High Court noticed the scope of the controversy in the proceedings thus :

"The short question which falls for determination is whether the company is liable to pay duty under Tariff item No. 27(c) in respect of process of backing of duty paid aluminium foils...."

The High Court proceeded to answer this question against the revenue on two grounds. The first was that respon