( 1 ) ON a reference made by Venkatachaliah, J. this case was posted before us for disposal.

( 2 ) THE Davangere Cotton Mills Limited, Davangere Chitradurga District ('dcm') with its registered office at Davangere, a public limited company incorporated under the Companies Act, is the petitioner before us. The petitioner is operating a composite textile mill at its factory situated on Chitradurga Road, Davangere City, inter alia manufacturing different kinds of yarn which is ultimately consumed in its own factory for the manufacture of different kinds of textile or fabrics. For the manufacture of different kinds of yarn and textiles or fabrics the petitioner had obtained separate licences from the competent licensing authority under the Central Excises and salt Act of 1944 (Central Act No. 1 of 1944) and the Central Excise Rules of 1944 framed there under ('the Act and the Rules' ). The different kinds of yarn manufactured at the factory are dutiable to excise duty under tariff item Nos. 18 III, 18a and 18e of the First Schedule to the act and we are concerned with the levy of duty on such yarn manufactured at its factory.

( 3 ) EVER since the Act was extended to t