The petitioner is a limited company registered under the Indian Companies Act. It is engaged in the business among others of manufacturing fibres/tops. The item falls under sub-item I of Item 18 of the First Schedule to the Central Excises and Salt Act, 1944

"During the processes admittedly the manufacturers get what is called solid undrawn waste and fibrous drawn waste. Hence the process of making fibre out of waste starts with manual sorting out of different type of wastes, washing and cleaning them manually and drying. The dried lumps and other wastes are crushed into small bits. Filament wastes are cut and pellatized. These are fed into the main plant reactor. Therein MEG is used only as an assisting agent. It is made clear in the reply affidavit that in the process of manufacturing fibre/tops using waste DMT is not at all used. MEG also is used only as an assisting agent and the entire quantity of MEG (Glycol) comes out in the same form except for marginal loss on account of handling. In other words, but for a minimal loss the entire MEG (Glycol) in the process of manufacture from waste is fully recovered by the manufacturer.

2.While so on 12th August, 1977 the Gover