The Union government had appealed against the Bombay high court judgment allowing the petitions of Garware Nylons and other manufacturers of nylon, used mainly in making fishing nets and parachute cord. The present judgment will save substantial amounts in excise for the nylon manufacturers.
Nylon yarn gets certain concessions in excise duty. Till 1975, nylon twine also got this advantage. But a new entry was added to the list of goods in that year, which started the debate.
The authorities contended that twine was not entitled to the exemptions. The manufacturers paid the duty under protest and later appealed to the high court. The high court ruled in their favour.
The Supreme Court stated that both products were understood to be of the same class in trade circles. If the authorities wanted to prove otherwise, they had to discharge the burden of proof. In this case, this has not been done. Therefore, the bench consisting of Justice S P Bharucha and Justice K S Paripoornan dismissed the appeal of the Union government.