Laminated jute goods are not jute manufactures within the meaning of Item 22a of the First Schedule to the Central Excises and Salt Act, 1944, and the differential duty on laminated jute goods is, therefore, not leviable.

( 1 ) NO amount of ingenious arguments by the learned Counsel for the respondents could convince me that this application should be rejected on any of the grounds urged by him. The petitioner, Dalhousie Jute Co. Ltd. , is a well-known company owning and manufacturing jute goods in its miffs at Champdani in the district of Hooghly. In 1960 a plant for the production or laminated jute goods by processing jute cloth or bags with waterproof polythene coated paper, gum tapes and other packaging items was installed in the petitioner's mill premises. It is claimed in the petition that this Converter Division was an entirely separated and segregated unit from the petitioner's jute mills but this is streneously denied in the affidavit-in-opposition where it is claimed that the said Converter Unit is situated within the petitioner's jute mills premises, having the same entrance and exit and was part of the said mills. The petitioners claims that for the purpose of processing jute goods in its Converter Plant, it used to obtain supplies of such jute goods from other jute mills and also took such jute goods from its own mills at Champdani. By Section 16 of the Finance Act, 1962 Entry 22a was introduced in the First Schedule to the Central Excises and Salt Act, 1944. The said item was as follows:--22a.-- Jute manufactures (including manufactures of bimplipatam jute or of mesta fibre), all sorts of (i) hessian. . . . Rs. 250 /- per metric tonne (since increased to Rs. 450/-); (ii) all other descriptions of jute manufactures not otherwise specified (including cloth bags, twist yarn, rope and twine ). . . . Rs. 125/- per metric tonne (since increased to Rs. 250/-).

( 2 ) THE petitioner's case is that since, the imposition of Excise Duty on Jute manufactures it had been purchasing jute goods from other mills on which Excise Duty had already been paid. So far as supplies obtained from the petitioner's own mill were concerned. Excise Duty was being paid on the same being transferred from the petitioner's jute mill to the Converter Unit.

( 3 ) DISPUTES and differences arose between the petitioner and the Central Excise Collector as to whether Excise Duty was payable on the laminated jute goods produced by the petitioner in its Converter Unit. An order in writing dated the 21st November, 1903 No. VI-Jute-21-4-62/12508, was addressed, inter alia, to the petitioner describing the subject of the communication as "jute manufactures -- lamination of jute manufactures in the Converter Division of Messrs. Dalhoushie Jute Mills. " By the said order the petitioner was intimated, inter alia, that the Converter Division being located on the same floor and under the same roof as the spinning and weaving and other departments of the petitioner's mills and both having a common entrance and exit, the petitioner's contention that the Converter Unit was a distinct and separate manufacturing department could not be accepted. The petitioner was further referred to an order of the Collector of Central Excise, West Bengal dated the 21st February, 1963 wherein it had been ordered that if special treatment, such as, lamination or polythene lamination of jute cloth was done within the factory of manufacture and if the weight of jute in such product was not less than 40 per cent, of the total weight, duty would be charged on the basis of the weight of the laminated products. The petitioner was accordingly informed that so far as the laminated jute goods produced from jute supplied by its own mills duty would be charged on the basis of the weight of the final produce after lamination. So far as the jute cloth brought from other mills for lamination was concerned two options were offered to the petitioner, namely, (i) The petitioner could bring the cloth in bond in which case it would have to pay duty on the total weight of the laminated cloth on its clearance from the Dalhousie Jute Mills, or (ii) The petitioner might bring the cloth from other mills on pa