( 1 ) THE short question raised in this petition under Article 226 of the Constitution of India is whether waste/scrap obtained in the course of manufacture of tyres, tubes, flaps and other products by the petitioner company are "goods" classifiable under Tariff Item 68 of C. E. T. and liable to excise duty.

( 2 ) M/s. Modi Rubber Ltd. , a company registered under the Companies Act, 1956, petitioner No. I, is carrying on the business of manufacturing and selling tyres, tubes, flaps and other rubber products. These goods are manufactured by the petitioner-company at its factory at Modipuram. For the purpose of manufacturing these goods, the petitioner-company mixes rubber with various other chemicals to form a rubber compound. A small quantity of the compound is rejected during the production process due to certain defects such as wrong mixing or over heating. The petitioner-company claims that this defective or rejected rubber compound is in the. nature of waste. At various stages of the manufacture of the goods, some quantity of rubber cuttings treated as waste also emerges. Then sub-standard and defective goods are destroyed by cutting and punching and is being tr