( 1 ) TWO common questions arise in this and the following petitions Nos. 752 of 1961 1054 of 1963 639 of 1963 and 917 of 1963 and therefore it would be expedient to have them disposed of together. In the last three petitions Nos. 10545 of 1963 633 of 1953 and 917 of 1963 however some additional questions are raised and therefore they will have to be dealt with separately. The two questions that are common to all these petitions are (1) whether the petitioners are manufactures of cotton fabrics as defined in the Central Excises and Salt Act 1944 and the rules made thereunder and (2) even if they are so whether the cotton fabrics in question which they are said to have manufactured or got manufactured attract the provisions of rules 7 and 9 of those rules or whether they enjoy exemption granted under the notifications issued by the Central Government under rule 8 of those rules. No. 751 of 1961.

( 2 ) IN this petition we are concerned with Tarun Trading Co. a proprietory concern carrying on business as wholesale dealers in cotton textiles and of which the petitioner is the sole proprietor. According to the petition an oral agreement was arrived at between the Ankleshwar Handloom Weavers Co-operative Purchaser Society Ltd. Ankelshwar (hereinafter referred to as the society) whereunder the society agreed to supply power-loom cloth according to the varieties required by the petitioner. Under the agreement it was agreed that the petitioner should pay the cost for yarn which the society would purchase from Messrs Manoj Textile Mills such payments being on behalf of the society and the society was to supply cloth to the petitioner by adding to the cost of the yarn what in the petition are called manufacturing charges which included reasonable profits of the society. These charges were Rs. 0-2-3 Rs. 0-2-9 and Rs. 0-3-3 per yard depending upon which of the three varieties bearing Nos. 4055 6052 and 7060 was made and sold to the petitioner by the society.

( 3 ) BETWEEN September 12 1960 and December 31 1960 the society supplied 71 638 linear yards of power-loom cloth of the total value of Rs. 55 781 to the petitioner. This cloth as aforesaid was manufactured out of yarn purchased from Messrs Manoj Textile Mills and for which the price as alleged in the petition was paid by the petitioner on behalf of the society. According to the petition the petitioner was the purchaser of the goods and it was the society which was the manufacturer. The society being a co-operative society was exempt from payment of excise duty under the notification dated April 30 1960 issued by the Central Government under rule 8 and it was the case of the petitioner that no duty was recoverable on the said goods sold by the society and purchased by him.

( 4 ) THE society was registered in February 1948 under the Bombay Co-operative Societies Act 1925 and was composed of members who were the owners of power-looms. The practice followed by the society was that the society would collect orders then supply yarn to its members and the members would manufacture cloth out of such yarn on their looms employing in their turn weavers to whom they would pay weaving charges. The society in its turn would pay to its members weaving charges. The society then would sell the cloth so manufactured at rates fixed after taking into account the weaving charges paid by it to its members certain administrative expenses and other charges such as packing transport etc. and reasonable profits. The petitioners case was that the bills of sale issued by the society came to Rs. 55 781 which included the cost of yarn purchased by the society from Messrs Manoj Textile Mills together with weaving charges other charges and profits all of which were valued in the rates above mentioned though in fact the petitioner had already paid to Messrs Manoj Textile Mills the price of the yarn on behalf of the society.

( 5 ) IT would seem that the excise authorities started investigation into tr