Cushion repair compound, being a rubber product used for the repair of tyres, is not exempt from excise duty under Notification No. 71/68-C.E., dated 1st April 1968.

M.N. CHANDURKAR, C.J.

The appellant-company are manufacturers of rubber products such as tread rubber, camel back, cushion gum, tread gum, cushion compound which is also known as cushion repair compound and tread packing strips. We are in this appeal concerned with the liability of the appellant-company to pay excise duty in respect of the cushion repair compound.

2.In the year 1969, the appellant took the stand that cushion repair compound manufactured by them was not excisable and that they were paying duty under protest. The case of the appellant that cushion repair compound was not liable to excise duty was rejected by the Assistant Collector. An appeal against this order was rejected as time-barred by the Collector on 20th September 1971. A revision petition filed against the order of the Appellate Collector was rejected by the Government of India on 5th October 1972.

3.The appellant once again submitted a classification list on 16th May 1972. describing the product manufactured by it as cushion repair compound and paid duty under protest. A fresh classification list was again filed on 1st December 1972. The contention of the appellant was that cushion repair compound which is admittedly not used for retreading or resoling of tyres as mentioned in Notification No. 71/68-C.E., dated 1st April 1968 was exempted from excise duty. It will be useful at this stage to refer to the Notification dated 1st April 1968 which reads as follows-

"In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, and in supersession of the Notification of the Government of India in the Ministry of Finance (Dept. of Revenue) No. 31/64-Central Excise, dated 1st March 1964, the Central Government hereby exempts all rubber products, in the form of plates, sheets and strips unhardened whether vulcanised or not., and whether combined with any textile material or otherwise (other than the products which are made either wholly or partly of rubber and which are used for the resoling or retreading of tyres, including the products commonly known as tread rubber, camel back, cushion compound, cushion gum, tread gum and tread packing strips) falling under sub-item (2) of Item No. 16-A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from whole of the duty of excise leviable thereon." *

4.The Assistant Collector who gave a personal hearing to the appellant took the view that cushion repair compound was an excisable item falling under Item 16A (2)and that it was not eligible for the exemption contained in Notification No. 71/68 read with Notification No. 27/73. An appeal against this order came to be rejected by the Appellate Collector of Central Excise on 22nd January 1974. It appears from the appellate order that the Appellate Collector relied on the earlier order of the Assistant Collector, dated 20th June 1969 which stood confirmed finally by the rejection of the appellant's revision petition by the Union of India. When the appellant-company approached the Government of India in its revisional jurisdiction against the order of the Appellate Collector, the Government of India took the view that on the express terms of the Notification dated 1st April 1968, the product 'cushion compound' was assessable to duty. These adverse orders were challenged by the appellant in a writ petition filed in this court. It appears that before the learned Judge, a notification dated 1st March 1973 which amended the notification No. 71/68 dated 1st April 1968 was produced. The amendment made by this notification dated 1st March 1973 was that in the notification dated 1st April 1968, for the words 'used for the resoling or retreading of tyres' the words 'used for resoling, retreading or repair of tyres' shall be substituted. Another notification which was produced before the learned Judge was the Notification dated 14th October 1972, which reads as follows-

"In exercise of the powers conferred by sub-rule (