UNION OF INDIA vs STATE OF MYSORE

The Supreme Court upheld the High Court's decision to quash the demand notice issued under the Central Excises and Salt Act, 1944, specifically referencing item 26AA added by the Finance Act of 1962. The Court established that the demand for excise duty on the 'pre-excise stock' of iron and steel products was unjustified as they were not liable for duty before the amendment. The Court affirmed that the State's Implements Factory was not liable for excise duty on products manufactured from stock that had not previously borne excise duty, thus ruling in favor of the State Government.